Entry Opportunities – XAG/USD

Filed under: Learn Forex Trading |

There have been a couple of decent entry opportunities to get short on the XAG/USD pair recently (the pair for silver), and I would like to talk you through these possible entries right now.

 

Figure 1.

Figure 1.

If you take a look at Figure 1, you will see the daily chart for the XAG/USD pair. What you can see here is that this pair is in a very powerful bear trend, with the 8-day exponential moving average crossed well below the 21-day exponential moving average, and the chart very visibly moving down from left to right. The pair has in fact been very bearish for some time, and has broken through some very important long-term levels in the market. Therefore, I would only be looking to take a short position on this pair at present, as anything else would be significantly going against the current momentum.

 

I have highlighted two inside bar setups that formed recently on this pair, and both provided viable entries to get short. A good way to play inside bar setups in a bear market is to go short at the break of the low of the mother candle, with a stop loss placed just a few pips above the high of the mother candle, aiming for a target of at least two times the risk. There is a also a pin bar spliced between these two inside bars, and this also would have provided a good entry, perhaps putting an order in to go short at a 50% retracement of the pin bar, with a stop loss placed just a few pips above the high of the pin bar. If you have managed to get short on this pair, then congratulations, as it seems that this bearish momentum has some way to go yet.

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