I just found it, it’s because I missed placing the text domain in ” in my php code.
It should be
__('Read More', 'my-custom-dragon-plugin');
instead of
__('Read More', my-custom-dragon-plugin);
Now my translation is working. I am just wondering now if it is possible to use a custom text domain instead of my long plugin slug.
I was able to figure it out before I saw @mat ‘s answer. I upvoted your comment though @mat.