Live Trade – Pin Bar on EUR/USD

Filed under: Live Trades |

 

I currently have a live order on the EUR/USD forex pair (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.

First of all, take a good look at Figure 1. This is a macro view of the daily chart for the EUR/USD pair. To begin with, it should be noted that price is currently making a 50% retracement from the previous highs. This is always a relevant area on any price chart. To add to this, price is also approaching a previous area of support/resistance (the upper horizontal green band marked in on the chart). This was an area that first acted as resistance, and then as support in the previous bull trend. Therefore, what we are looking for is a reaction to this area once again in the form of a bearish price action signal.

 

Figure 2.

Figure 2.

This bearish price action signal did indeed come in the form of a well-defined bearish pin bar. If you now look at Figure 2, you will see a close up of this setup at our area of support/resistance. As you can see, I have put 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, and an initial target set just above the next possible area of support/resistance, which happens to be around 5.5 times that of our risk. This is a fabulous risk-reward scenario. However, I will be managing the trade if it is entered, and moving up stops as appropriate based on what price action tells us. Hopefully, this order will be filled today, and then price will start moving in the right direction.

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