Trade Example – EUR/USD Trend Trading

Filed under: Learn Forex Trading |

I have another example for you today of a pin bar trade with the dominant trend, and once again, this example comes on the EUR/USD forex currency pair (the exchange rate between the euro and the United States dollar) via forex testing software Forex Tester (www.forextester.com).

Figure 1.

Figure 1.

If you take a look at Figure 1, you will see the trade setup in question. As you can see, the 8-day exponential moving average is crossed above the 21-day exponential moving average, and the chart is visibly moving up from left to right. Therefore, when a bullish pin bar formed that was going with this bullish trend, I put an order in to go long at a 50% retracement of the pin bar, with a stop loss placed just a few pips below the low of the pin bar, and no target set at all – aiming to managing the trade if the order was filled.

 

This order was indeed filled, and price started to move up rather nicely with two very bullish candles. A bearish pin bar followed this, so it was here that I moved my stop loss up to just a few pips below the low of this bearish candle. Although this was almost hit, price then consolidated and continued to move up. When another small bearish candle formed, I again moved my stop loss up to just below the low of this candle, and this time, the stop loss was subsequently hit for a very nice 6% rise on the bank (with the initial risk being 1%). This provided a very nice risk-reward scenario of 1:6, and easily wiped out the two previous losses that I had experienced. Well, that’s it for today – and I’ll be back tomorrow with yet more forex price action trade examples.

One Response to Trade Example – EUR/USD Trend Trading

  1. I don’t understand your entry.
    When I learnt price Action it was said: A bullish pinbar is only meaningful after an extended downtrend and a bearish pinbar is only meaningful after an extended uptrend.
    But of course such trades would be initially considered to be Counter Trend.

    Ian Foster
    May 21, 2013 at 4:09 pm
    Reply

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