Ok, I just got burned by getting stopped out 10 pips from my entry. (Ignore the current buy limit order and stop and target lines - those are for a pending trade.)

1.6427 is where I was in at 1.

SL @ 1.6478 - market got to 1.6476 bid and I was taken out.

The market then continued down.

So where did I go wrong?

Did I do anything wrong?

I just happened to get stopped out. The question is, where should I have re-entered?

Should I have re-entered? Should I have had a wider stop?

My thought was that I should have had an entry to go short at the closest resistance level 3 - with a SL maybe 30 pips away (H1 ATR?). Because if that’s where I would have placed it, the market would have come up, got me into the trade and continued down to the current price - approx 78 pips.

The risk is I miss the trade all together - so then does averaging in become key?

That’s why the current buy order is placed at the support level, with a stop 75 pips away (H4 ATR) - with the goal of catching a move back up.

Of course the continued question is - how do we determine directional bias?

So we should matrix:

Average in vs All in.

Tight stop + re-enter vs wide stop

Check this out - I just overlayed a fib retracement (actually approximate - as I use 37.5 and 62.5 - as I use the fib tool to break everything into eighths - but close enough).

We have confluence of the 37.5 and the resistance level at 1. This is exactly where the market came up and turned around (after hitting my stop.)

Is there validity in the fib and resistance level confluence?

Will have to take a closer look into.

Ok, crazy lines here…

Here’s the thought…

Instead of drawing fib levels from extremes, draw them from congestion midpoints. Doing that actually gets the 100% fib expansion to coincide with the support at 1.

Since it is only about 50pips risk at the current price to above the last reistance level at 2. To potentially make 150 pips if we hit the 100% expansion at 1, I’m going short here. We’ll see how that plays out.

As an aside, after redrawing the fib retracement to the new low at 2, the 50% retracement hits the former 37.5% retracement almost dead on.

So the question is, what is the value?

Is it in using fibs to find s/r levels that are potentially "stronger"?

Is it using s/r to calibrate the fibs to? In other words, use the s/r levels to line up fib retracement levels, then use those levels to do your fib projections?

And then not worrying so much about using price extremes for the fibs, but using price areas "of reason" to generate your fib levels.

Hmmmm…. interesting… we’ll see how this develops.

So from yesterday (around 1) we made our way towards the target, and fell short about 13 pips… so the question is, do we continue to hold, and wait for the market to hit our target, potentially allowing it to retrace even more… or do we take partial profits lowering our risk/reward ratio… or do we close out the trade and just bank profits.

Instincts tell me to bank some and let the rest ride… so that’s what I’ll do. Of course we were up about 88 pips before I started writing and as of now we are up about 78 pips…

I think we’ve entered into a consolidation/range - so I’ll keep an eye on it and bank profits as we move back to the center of the range.

On further analysis, at 2 we see the market had reached a support level - although we were not putting as much value on this level as it did not coincide with a fib level… so maybe we reached the target???

So how do we know which level to enter and exit at? Maybe the key is found at a higher timeframe… let’s take a look.

Anything to see on the 4hour chart?

The support level we were initially targeting (1) still looks good on the 4hr.

The support level we reached looks minor on the 4H.

So maybe we just need a retracement to gain enough steam to reach the 1.6243 level.

Although if it retraces to do that, I’d think it would potentially break through going to the next level of 1.6125

Otherwise another option would be for it to range - then tag the 1.6243 level as it ranged… allowing us to close out our short, and then enter a long. I’d probably lean towards this based on the move we had.

There is an FOMC meeting tomorrow, so we could see ranging all of today, with a lot of volitility tomorrow…

On the daily chart, as per TRT it looks as though we’ve entered into a range… so on this timeframe I’d expect the maket to make its way to the lower side of the range at 1.

So it may be a good idea to even remove our short term target in an attempts to capture larger profits. Or to close out 1/2 the trade and let the remainder ride.