USDJPY - My lesson in 'holding on' vs. 'cutting it short'
Been looking at the USDJPY for a while, and my biggest mistake recently was thinking I could just ride out a choppy period. I went long on what I thought was a solid pullback off the 151.00 psychological level, expecting a bounce back towards 152.00. Initial conviction was strong, but price just couldn't break through, instead it started to consolidate and drift downwards. My stop was placed logically below a previous swing low around 150.70. The issue? Instead of sticking to my plan when it started looking weak, I moved my stop further down to 150.50, then again to 150.30, rationalizing that 'it's just a bit of volatility.' Of course, it wicked through 150.30, and then just kept going, ultimately hitting 149.80 before I finally capitulated. Cost me way more than it should have, all because I didn't respect my initial risk and started playing hope. The market doesn't care about your hopes. It really highlighted for me that a valid setup becoming invalid means cutting it and looking for the next opportunity, not doubling down on a flawed premise.
It's a tough lesson to learn, but often that 'drift downwards' after failing to break a key level is a strong signal for a reversal or deeper correction. Were there any other indicators you were watching that might have provided an earlier exit signal?