A 30-pip stop loss and 30-pip take profit strategy is a 1:1 risk-to-reward ratio, where the goal is to limit your risk while capitalizing on a movement of 30 pips in your favor. Let’s break down how this could work for a bearish EUR/USD setup and how to approach it systematically.
1. Entry Conditions
You want to find an ideal point where EUR/USD shows bearish signals and offers a potential 30-pip drop. Some factors to look at for confirming your entry:
Break of Support: If the EUR/USD breaks below a key support level (on the 30-minute chart), this can be a strong signal for short entry. You would enter as soon as the price breaks below that level with momentum.
Bearish Candlestick Patterns: Look for confirmation with bearish candlestick formations like a bearish engulfing or a shooting star near resistance. This indicates that sellers are likely in control, providing you with a setup for a bearish trade.
Bearish Divergence: If oscillators like RSI or MACD show divergence where price makes higher highs, but the indicator makes lower highs, this can signal weakening bullish momentum, ideal for a bearish entry.
2. Stop Loss (30 pips)
For the 30-pip stop loss, here’s how you can position it:
Above Recent Swing High: Place your stop loss 30 pips above a recent swing high or resistance zone. This is a logical place to exit the trade if price retraces because it would invalidate the bearish setup.
Above a Key Resistance Level: If there’s a strong resistance level that price previously failed to break above, positioning your stop just beyond this level ensures that a false breakout doesn’t stop you out unnecessarily.
1. Entry Conditions
You want to find an ideal point where EUR/USD shows bearish signals and offers a potential 30-pip drop. Some factors to look at for confirming your entry:
Break of Support: If the EUR/USD breaks below a key support level (on the 30-minute chart), this can be a strong signal for short entry. You would enter as soon as the price breaks below that level with momentum.
Bearish Candlestick Patterns: Look for confirmation with bearish candlestick formations like a bearish engulfing or a shooting star near resistance. This indicates that sellers are likely in control, providing you with a setup for a bearish trade.
Bearish Divergence: If oscillators like RSI or MACD show divergence where price makes higher highs, but the indicator makes lower highs, this can signal weakening bullish momentum, ideal for a bearish entry.
2. Stop Loss (30 pips)
For the 30-pip stop loss, here’s how you can position it:
Above Recent Swing High: Place your stop loss 30 pips above a recent swing high or resistance zone. This is a logical place to exit the trade if price retraces because it would invalidate the bearish setup.
Above a Key Resistance Level: If there’s a strong resistance level that price previously failed to break above, positioning your stop just beyond this level ensures that a false breakout doesn’t stop you out unnecessarily.
Trade closed: target reached
Objective accomplished 
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.
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.