In the very short term here is a long trade idea on EAHere is another Forex Trading Snack.
This is an example that I saw in the market this morning ( my morning ) and my trade setup as I took it, long with my thoughts as I planed it out. Price action certainly has changed while I was slowly typing this post. Just an example of how I trade a larger true average range currency pair. The plan here is to trade long in a short term trade but I believe counter trend in a longer market view.
Let’s face it trading a pair that has also this kind of daily true range isn’t easy. I mean why risk more then you have to. Right? In my book I try to risk less even though I could live with that kind of daily true range.
So here it is in my view! This isn’t advice, just a guy who risks his own money in search of making a bit more then what has been risked. In other words I trade! And that’s the life of a trader.
On my 1H chart I see the 21 SMA line ( in black ) bending upwards, and price has challenged the 89 SMA ( in red ) but pulled back. Here is where most would use the low as a stop setting point if the entry was to go long, but that’s not in my plan.
I use the law of extra large candles. What that is I look for a longer candle ( up or down, green or red ) the kind of candle I believe is where a larger amount of money has been placed compared to the previous 5-10 or 20 candles. I quickly place a retracemen study on that candles body or even the next few candles after that one—-what I’m looking for is a good pullback, a tradable one that also has good support or resistances to then trade with a measured but well defined risk zone. One where the stop is but a small part of the daily true range.
So on my chart post you can see I really like the red box as my buy zone, under the red box as my stop area. But looking for a break out over the top pink line. A line that shows me where previous price action has on the way down had slowed with momentum and has capped upward movements, indicating a defensive line where the bears have stepped in pushing price back down. That’s the battle ground! Breakout above that pink line and some bears will cover and take profits if they have them. Thus pushing price farther and still higher.
The large somewhat oversized candle shows a shift in the short term momentum and direction but better still it shows where the money entered into the price action and so in my opinion a tradable zone to then target a set up.
All of this is just one tool in the traders tool box and just an example of a current real life in the market trading ideas and how one trader looks at a strategy of trading this market.
As always a trading plan need statistical evidence of past price action to then develop a statistical but personal edge in trading. And this only helps develop an emotional control to what could go wrong. Because in trading risk is the only controllable thing we as traders we can control along with emotional or none emotional decisions we make.
In trading you either make dust or you will eat dust!
All the best in your trading.
If you decide to trade any ideas always remember that the risk is all yours. Just because I trade a setup or as I have posted doesn’t mean that’s right for you to do the same.
