Trade Example – USD/SGD

Filed under: Learn Forex Trading |

 

I have a trade example for you today on the USD/SGD forex currency pair, which is the pair for the United States dollar and the Singapore dollar. This is a pair that I do not really trade on much, but I did spot a setup that I thought you might be interested in as a trade example.

 

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the USD/SGD pair. This is the chart that we look at to assess the trend. As you can see, the 8-day exponential moving average has recently crossed above the 21-day exponential moving average, and the pair has become bullish. The 8-day exponential moving average and the 21-day exponential moving average are also diverging apart, which is a good sign that a strong trend is in place. In this kind of market, we should only really be looking out for price action signals that confirm this bullish momentum.

 

Figure 2.

Figure 2 shows the 1-hour chart for the same USD/SGD currency pairing. What you can see here is that price pulled back for a little while before forming a bullish engulfing pattern (highlighted in yellow). This occurred at the 150-hour exponential moving average, which is often an area that acts as a good level of support/resistance. We could have put an order in here for a long trade at the break of the high of the bullish candle, with a stop loss placed just a few pips below the low of the move, and a target of four times our risk. As you can see, such a trade would have been successful for a very nice 4% rise on our bank. Well, that’s it for today’s trade example, and I’ll be back with more for you tomorrow. Until then, happy trading…

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