[EUR] Importance of Risk management

EUR/USD h4-hour chart, source: forexfactory.com

EUR/USD weekly chart, source: forexfactory.com

I have analyzed currency flow into the downward based on the head-and-shoulder pattern. But my guess was proved to be incorrect. I recommended the short bias in the short term, but the price of currency pair EUR/USD rose and faces the resistance price-band of 1.15.

I recognize my poor analysis. And I emphasize the risk management. All traders isn't a prophet. They, including me, trade by the probability, fundamental analysis and economy news. There is always the possibility of incorrect anticipation. The wrong trade is covered by the risk management. When a trader finds out his miss-trading, he response quickly not hold his position and opinion. There is loss cut.

I think and say to you that the anticipation is not important. The various patterns and signals are just materials helping your judgement. The importance is how to respond to unexpected market situation. If you are incorrect, you liquidate your position though you get the loss.

If I get the short position, I would record the loss. But I cut a loss and will wait another chance.

And I don't want recommend the long position yet, we need to watch whether the price of EUR/USD breaks through 1.15 or not. If you are not sure, you just watch the market and wait.

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