The Daily Trade – Day 24 (the result)

Filed under: Learn Forex Trading |

 

Trade Number 24 – AUD/NZD 1 Hour Chart (result)

 

Figure 1.

Yesterday, I alerted you to a trade setup on the AUD/NZD 1 hour chart. Just to remind you, the trade had entered a significant trading zone on the daily chart (see Figure 1.), and we had been looking for trading opportunities on both the daily chart and the intraday 1 hour and 4 hour charts. A price action signal emerged on the 1 hour chart (see Figure 2.), with a bearish engulfing pattern, and we took the trade with a stop loss just a few pips above the high of the move, and a target of two times our risk.

 

Figure 2.

Something I hadn’t noticed, which I should have, when I took the trade was that it was also a near perfect 50% retracement of the three week move down on the daily chart. This was a very powerful move with a lot of momentum, so a 50% Fibonacci retracement was a good area to get in on the move. Had I seen this, it would have added one more layer of confluence to an already strong setup, as it was already a strong area of support/resistance that has been tested and rejected three times on the daily chart within the past three months.

 

Figure 3.

Now, let’s take a look at the result of the trade. As you can see from Figure 3, the move continued down rather nicely, and we reached our target in ten or eleven hours. This was a nice quick profit of 2% of our bank. I should note that I also had a losing trade on the same day, which I have not covered on this blog. About 50% of my trades lose, but with a risk-reward of at least 1:2 on every trade, it allows me to come out on top.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>