The Daily Trade – Day 93

Filed under: Learn Forex Trading |

Trade Number 93 – EUR/NZD 1-Hour Chart

I have something a little different for you today. Since I have covered a lot in the way of engulfing patterns and pin bar setups recently, I wanted to give you an example of another kind of setup I sometimes use. It is called an “Inside Bar” and I have covered it before in one of the forex-related articles.

 

Figure 1.

The example today comes on the lesser popular EUR/NZD forex currency pair. If you first take a look at Figure 1, you will see the daily chart for the EUR/NZD pair. You will see that the pair had been trading sideways for a while before the 21-day EMA crossed over the 126-day EMA and we finally entered a strong up trend. There have been seven consecutive white bullish candles. We have also just broken through a significant area of resistance. All this tells us that we should only enter trades on the long (buy) side.

 

Figure 2.

If you now look at Figure 2, you will see the 1-hour chart for the EUR/NZD pair. The blue line is there to mark in an intraday level of support/resistance. As you can see, this resistance has become a new support level. On the 1-hour chart, the fast moving EMA is well above the slow moving EMA, telling us that we are in a strong up trend. A nice inside bar formed at this level (the bar marked with a red vertical line), showing some minor consolidation. What we can do here is set a buy stop at the high of the mother candle of the inside bar (the bar preceding it), and set a stop loss a few pips below the low of the mother candle. Our target here could be three times our risk because our stop loss is quite tight.

Figure 3.

 

Figure 3 shows how the trend continued and our trade was successful. Well, that’s all I have for you today; and I’ll be back tomorrow with yet another trade example.

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