The Daily Trade – Day 74

Filed under: Learn Forex Trading |

 

Trade Number 74 – NZD/USD 1-Hour Chart

As the foreign exchange market is a 24-hour market, you have to accept that you cannot get on all the trades that you would like. This is what happened to me yesterday and a very nice trade setup emerged when I was getting my beauty sleep. The trade in question was on the NZD/USD forex currency pair.

Figure 1.

 

If you first take a look at Figure 1, I would like to show you the significant areas of support and resistance on the NZD/USD daily chart. You will see that there are several green “zones” drawn in on the chart to show the support/resistance areas – and the one in question is where price is approaching on the right hand side of the chart. This is an area that has been tested and has held on four or five occasions on this chart. So it is an area that we should keep a good eye on for any price action setups on the daily and intraday 4-hour and 1-hout charts.

 

Figure 2.

Figure 2 shows the 1-hour chart for the NZD/USD pair. You will see that price touched the green zone before forming a nice bearish engulfing pattern. This would have been our signal to get in on a short trade with a risk-reward of at least 1:2, so your target will be at least double of whatever it is that you are risking. A stop loss should have been placed just a few pips above the high of the move.

Figure 3.

 

And finally, Figure 3 shows that price continued to move down from this level, and a target of two times your risk would have been achieved. This serves as yet another good price action trade example. I’ll be back with more next week. Until then, have a great weekend.

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