Live Trade Example – EUR/USD

Filed under: Live Trades |

I have a trade example for you today that is actually still in progress, and you can follow the outcome on my published forex account at: http://www.myfxbook.com/members/jjrgaskell/daily-trade/357261.

 

Figure 1.

If you look at Figure 1, I will explain my reasons for taking this particular trade. What you are looking at is the 4-hour chart for the EUR/USD forex currency pair, which for those of you that are new to this, is the exchange rate between the euro and the US dollar.

 

What you can see is that price reached a peak, before reversing and moving back down. I noted that when price had been moving up, a nice resistance level had formed before being broken through (see the horizontal green band), and when it was moving back down, this resistance level then became a new support level, and was respected very nicely. Price has now broken through this support/resistance level, and closed decisively below this level on the 4-hour timeframe.

 

I decided to put an order in to go short at a 50% retracement of this bearish candle, with a stop loss placed just a few pips above the high of this bearish candle, and with a target set of two times my risk. Price formed a nice pin bar to allow my order to be filled, and price has since moved down to put us into profits. When we were in profits equal to our risk, I moved the stop loss to breakeven – so we are now in a risk-free trade. We are currently in profits to the tune of around 70 GBP, so we will now see how this one plays out. That’s all that I have for you today, and hopefully this trade will have come to fruition by tomorrow and we will have even more profits to add to this excellent month of trading. Until then, happy trading!

 

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