The Daily Trade – Day 80

Filed under: Learn Forex Trading |

Trade Number 80 – AUD/NZD Daily Chart

Now, although the vast majority of my trades do come on the 4-hour and 1-hour charts, I do occasionally get a good setup on the daily chart that I simply cannot refuse. Although these trades can take quite a lot longer to come to fruition and can tie up your valuable funds for a while, they can be very profitable as the levels and setups have a high level of reliability.

 

Figure 1.

Let’s look at the levels of support and resistance first on the daily chart then. As you can see from Figure 1, price had broken through a very strong level of support/resistance that had been respected on a number of occasions going back to last year (four or five times in fact). There had also been a change of polarity, where the strong support level had finally been broken and subsequently became a strong resistance level. Price then broke through this resistance level again, and we could be anticipating another change of polarity and be looking out for any price action setups at this level.

 

Figure 2 shows the daily chart again but this time we are zoomed in a little bit so you can see a bit better. You will see that a very nice pin bar formed on the daily chart here at this strong support/resistance level, which is marked in on the chart as a green “zone”. This would have been a good place to take a long trade, with a stop loss just a few pips below the tail of this pin bar.

 

Figure 3 shows that price did indeed continue to move up and a target of two times our risk could have been locked in for a very nice rise on our bank. More tomorrow.

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