Live Trade – EUR/USD (breakout)

Filed under: Live Trades |

 

I have a live trade order in on the EUR/USD forex pair at the moment (the pair for the euro and United States dollar), and I would like to talk you through this rather simple setup right now.

 

Figure 1.

Figure 1.

If you take a look at Figure 1, you will see the daily chart for the EUR/USD pair. This is the only timeframe that we will need to look at for this particular setup, as all of the information that we require is contained within this timeframe.

 

In the middle of this chart, you will see a horizontal green band, which I have drawn in to mark a significant area of support/resistance. As you can see, this area has been respected six or seven times in the past few months, so I was on the lookout for any price action signals at this level. As it happens, price has now blasted through this zone, making for a very bullish breakout signal.

 

Figure 2.

Figure 2.

Figure 2 shows a close up of this chart at the area that we are interested in. This bullish candle has taken out the last four days of price action, including a bearish engulfing pattern. Therefore, I have put an order in to go long at the break of the high of this bullish candle, with a stop loss placed just a few pips below the low of the bullish candle. I have risked 1% of the bank on the trade, but I have not set a target, as I will be watching the close of each daily candlestick closely and moving my stop up as appropriate. Each candle tells us something about the narrative of the market, and by listening to that narrative, we can take what the market gives us, and get out of the market when any bearish signals imprint on that market.

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