Live Trade – EUR/USD

Filed under: Live Trades |

I currently have a live trade on the EUR/USD pair (which is the pair for the euro and the United States dollar), and I would like to talk you through the ins and outs of this setup right now.

 

Figure 1.

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the EUR/USD pair, and we will use this timeframe to assess the trend and the support/resistance levels. In fact, it is the only chart that we will need for this particular setup, as all of the information that we require is contained within this chart.

 

What you can see in Figure 1 is that the pair has been moving down very nicely recently with some good bearish momentum. This is confirmed by the fact that the 8-day exponential moving average is crossed below the 21-day exponential moving average, and it has been for quite a few days now. Therefore, as this market is now bearish, it is better to be on the lookout for any bearish price action signals at significant areas of support/resistance.

 

Figure 2.

Figure 2.

I have marked in a very significant area of support/resistance on this daily chart (marked with a horizontal green band – the one in the middle of the chart where price is currently hovering). So, when price formed a bearish pin bar right at this area (see Figure 2), I put an order in to go short. However, as the close of this pin bar was almost half way into the pin bar, and as I wanted a really strong risk-reward ratio, I put an order in to go short at two-thirds into the pin bar, with a stop loss just a few pips above the high of the pin bar, and a target of five times the risk. The order has now been filled, and we will see how this one plays out…

 

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