Live Trade – EUR/USD

Filed under: Live Trades |

I discussed a trade on the EUR/USD pair yesterday, which unfortunately was a little premature and did not come off. However, I now have another live trade on this pair, and I would like to talk you through this setup right now.

 

Figure 1.

Figure 1.

If you take a look at Figure 1, you will once again see the daily chart for this pair, which I actually provided a commentary on just yesterday. To recap, in the middle of the chart, there is a very strong level of support/resistance, and it is this level that we have been keeping a very close eye on for any price action signals.

 

Figure 2.

Figure 2.

If you now look at Figure 2, you will see the 4-hour chart for the same EUR/USD pair. You will also see the first (failed) bearish engulfing pattern right at the level of support/resistance. This was the trade that I made yesterday, and as you can see, it was a little premature. Since then, another bearish engulfing pattern has formed, and this coincided with a bearish divergence with the RSI indicator. This was a strong signal and one with much confluence, and as such, I put another order in to go short, this time at the break of the bearish candle, with a stop loss just above the high of the move, and a great risk-reward target set of five times the risk. This order has now been filled, with another big bearish engulfing pattern starting to form, putting us in some profits. If the trade moves into significant profit, I might then move the stop to breakeven, as an insurance policy, and I will watch price action carefully and take what the market gives us. If we are lucky, we might get the full five times our risk, but we should also take some profits if any bullish signals appear, and listen to the narrative of the market.

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