I Exited Early But Still Made Money

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It is the ongoing question for traders…do I take my money now, or wait for the target to be hit?

This was one of those instances.

This is a Counter Trend Trade back to the daily missed central pivot in the EURUSD.  As you can seen in the picture, the missed pivot happened on Wednesday and I took the first initial position as soon as S3 was hit.

I then put in limit buy orders all the way up to 3485, with a final target of 3495.  There were a total of 26 lots in this stack and I could have made a total of +22% on the trade if my target was hit.

When Monday came around however, price gapped up, then immediately started heading downward.  This made me very nervous since most of my positions were entered at that point.  I impulsively closed all the trades down for a +5.2% gain on the account.

Don’t get me wrong, I’m not complaining about it, I made money and that is what it is all about.  But had I consulted the charts a little closer, I may have been able to stay in a little longer.  This is why a post trade review is necessary.

As you can see in the picture, what I should have done was to see how price reacted to the gap.  I don’t remember who I learned this from, but they teach it frequently in stock market courses.

When price gaps, generally that gap will 1) be filled and 2) serve as a support/resistance level if price is going to continue in the direction of the gap.  And what do we see in the picture?  Price bounce almost exactly at the bottom of the gap and hit my target.

Now, this is NOT to say that this will happen all the time, but maybe I should have set a mental stop to exit if price broke the bottom of the gap my a certain number of pips.

Anyway, I am still happy with the result.  I am trying not to let myself get too down in situations like these.  At least I made money, and it is on to the next trade!

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