Reflecting on my worst trade this quarter: USD/JPY
My biggest mistake this quarter was definitely chasing USD/JPY longs above 150.80. The setup seemed clear enough: carry trade momentum, persistent BoJ dovishness, and what looked like a strong technical breakout. I went in with standard sizing, but the velocity of the move quickly brought it into profit. Instead of trailing properly or taking partials, I got greedy. The thinking was, "this is going to 152 minimum." Of course, it didn't. The subsequent rejection candle was sharp, and instead of admitting the error and cutting, I held, even adding to the position on what I told myself was a retest of support, which quickly failed.
It bled out for a few days, eating into prior gains. The lesson, once again, is that a good setup can still go bad, and you have to respect the initial stop, or at least your profit-taking plan. Emotionally, it felt like I was giving back what I'd 'earned', rather than acknowledging a new market reality. Classic overstaying, compounded by doubling down. It wiped out a good chunk of my Q2 gains.
It's easy to get caught up in the momentum when a trade starts strong, especially with a clear narrative. Did you have a predefined exit strategy or profit target for that trade, or was it more reactive to the initial breakout?