EURUSD - Bearish pinbar is forming off of bearish pennant
Updated
A major sell signal is potentially forming in the EURUSD -0.02% . A large bearish pennant has formed and a bearish pinbar is currently forming off of the top of this pattern. The pennant pattern is giving us our bias and the candlestick pattern is giving us our entry signal. If the daily candle closes bearishly then this could be a tradeable setup. I will update my analysis after candle close.
**Market Structure**
-A bearish pennant format has been building since June
-A major selloff lead into the pennant pattern which give this set an even greater bearish bias
-A bearish pinbar is forming on the daily chart from the top of the pennant channel. This is create a major confluence of sell signals
**Trading Tips**
-If the daily candle closes as a bearish pinbar we may see price crash hard in the coming days
-Whenever a bearish price action candlestick forms off of the top of a bearish pattern it creates the most optimal risk/reward setups
-DO NOT JUMP THE GUN, WAIT FOR THE DAILY CANDLE TO CLOSE
**Trade Ideas**
-If the daily candle closes as a bearish pinbar a short entry can be made multiple ways, with varying risk/reward profiles. On the Forex markets a trader could wait for a break of the bottom of the and then enter short, or for a more risky but better Risk/Reward profile a trader could enter short if price retraces back up the pinbar , or a combination of both for a hybrid trade.
-Another way to trade this is by selling a call on the futures market (ticker /6E). This would allow a trader to profit from a drop and also collect premium in case price moves sideways and does not aggressively drop as expected.
-Finally the ETF FXE -0.07% could be traded as either outright stock or a synthetic short position could be created using the stock options.
**Market Structure**
-A bearish pennant format has been building since June
-A major selloff lead into the pennant pattern which give this set an even greater bearish bias
-A bearish pinbar is forming on the daily chart from the top of the pennant channel. This is create a major confluence of sell signals
**Trading Tips**
-If the daily candle closes as a bearish pinbar we may see price crash hard in the coming days
-Whenever a bearish price action candlestick forms off of the top of a bearish pattern it creates the most optimal risk/reward setups
-DO NOT JUMP THE GUN, WAIT FOR THE DAILY CANDLE TO CLOSE
**Trade Ideas**
-If the daily candle closes as a bearish pinbar a short entry can be made multiple ways, with varying risk/reward profiles. On the Forex markets a trader could wait for a break of the bottom of the and then enter short, or for a more risky but better Risk/Reward profile a trader could enter short if price retraces back up the pinbar , or a combination of both for a hybrid trade.
-Another way to trade this is by selling a call on the futures market (ticker /6E). This would allow a trader to profit from a drop and also collect premium in case price moves sideways and does not aggressively drop as expected.
-Finally the ETF FXE -0.07% could be traded as either outright stock or a synthetic short position could be created using the stock options.
Trade active
I entered short on a bearish hammer that formed on the 12 hour charts. I entered short by creating a synthetic short position(buy put/sell call @ same strike) using FXE stock options, and then sold some way OTM calls to greatly reduce buying power requirements.Note
Up 120 pips so far in this trade. If NFP tomorrow tanks this the shorts could easily pick up another 200 pips. We shall see.Trade closed manually
Closed this for a really nice profit. Price has bounced off of key support @ 1.15 and shown some strength so I am going to lock on profits. If there is a new bearish price action signal that is thrown I will consider re-entering short. I would really like to see bearish price action from the 1.1650 level.Trade active
This trade is definitely still in play and the 1.1500 level is really at risk of breaking. A failed retake of the pennant is an ominous sign for bulls. I decided to play this a little differently this time around. Rather than by synthetically short I have sold a number of naked calls. This gets me directionally short but also provides profit in possibility that price continues bouncing around 1.15 and 1.16. If I am directionally correct I should be able to close these calls very quickly. I have sold the 111 calls in FXE for $1.04 credit per contract.The follow up plan is if FXE plummets to 108 or less I will begin selling OTM puts and rolling down my calls to continue picking up high premium
Trade active
Sold a number of puts at the 107 strike for $0.60 credit, turning this into a short straddle play now and doubling premium collection. The idea behind this is after a more than 400 pip drop since first taking this trade 2 weeks ago, I expect price to stabilize and perhaps pop up a little in the coming weeks.
Dad of 5 • Dev • Candlestick Whisperer • Crypto class of 2019
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