On the EURGBP 1H time frame there was recently a perfect head and shoulders pattern that formed.
A strong neckline break followed by a 50% pullback and then a strong bearish engulfing set up a perfect high probability trade.
The head and shoulders pattern confirms that the trend is temporarily turning bearish.
The engulfing candle opened perfectly at the neckline and spiked up forming a huge wick.
The engulfing candle engulfed 6 previous candles which increases the probability of further bearish momentum.
As soon as the bearish engulfing candles closes, it is safe to enter short.
A safe stop loss would be placed slightly above the high of the bearish engulfing candle.
A riskier stop loss would be placed slightly above the bearish engulfing candle body high.
A 1:3 risk to reward offers plenty of profit.
It is also important to note that the bearish engulfing candle closed at 3am CST.
A strong neckline break followed by a 50% pullback and then a strong bearish engulfing set up a perfect high probability trade.
The head and shoulders pattern confirms that the trend is temporarily turning bearish.
The engulfing candle opened perfectly at the neckline and spiked up forming a huge wick.
The engulfing candle engulfed 6 previous candles which increases the probability of further bearish momentum.
As soon as the bearish engulfing candles closes, it is safe to enter short.
A safe stop loss would be placed slightly above the high of the bearish engulfing candle.
A riskier stop loss would be placed slightly above the bearish engulfing candle body high.
A 1:3 risk to reward offers plenty of profit.
It is also important to note that the bearish engulfing candle closed at 3am CST.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.