I have done quite a few intraday trades and have well noticed that Capitalisation Matters.Here is an instance:
I had sold the EUR/USD pair at 1.2994 after it was overbrought with RSI at 80 and a bearish divergence on the RSI. The pair was at an area of resistance and was very likely that it will come down.
But after I entered the price reverted back fast and so I liquidated my position to prevent further loss (my loss 27 pips). The price went up by more than 30+ pips before coming back down.
From my analysis I have noticed two factors for the price to revert (1) Price was above the moving averages and (2) Draghi of ECB was about to make comments sometime later.
But whatever be the factors, if I had a larger capital, I would have kept the trade open and instead of suffering a loss, I would have made a profit of around 20 pips as price went down later.(not shown in this chart).
What would experienced traders say about the matter about traders with low capital? What moving averages to use in time frames of 10 min and below?
I would be very thankful to you all as I am still learning.