GBPUSD: Bearish Engulfing Candlestick Evident On H4
What is the norm after a bearish engulfing candlestick appears? Of course to short. As seen in the graph, on a 4-hour timeframe, a bearish engulfing candlestick appears which results in Great British Pounds losing value while the United States of American Dollars gains value. According to the standard, when a currency pair goes short, it means a smaller unit of the quote currency will now be required to get a unit of the base currency.
So from the diagram above, the price is predicted to drop to point A (1.29812) and if the price doesn't go below the 38.2% Fibonacci level, then it will spike to point B (1.31719) which was set as the initial stop loss. But, it the price goes below 1.29812, then it is predicted to reach point C (1.29223). Therefore, point A and C are the predicted target profit while point B is the stop loss.
Advice: Place two trades simultaneously, using standard risk management, then close one trade when it reaches TP1 (1.29812) and watch the other trade if it will reach point C, then close as well. TP1 is guaranteed.
This is just my opinion. What's yours?
So from the diagram above, the price is predicted to drop to point A (1.29812) and if the price doesn't go below the 38.2% Fibonacci level, then it will spike to point B (1.31719) which was set as the initial stop loss. But, it the price goes below 1.29812, then it is predicted to reach point C (1.29223). Therefore, point A and C are the predicted target profit while point B is the stop loss.
Advice: Place two trades simultaneously, using standard risk management, then close one trade when it reaches TP1 (1.29812) and watch the other trade if it will reach point C, then close as well. TP1 is guaranteed.
This is just my opinion. What's yours?