Pending Long AUD/USD - Trend Line Bounce + Pinbar/Doji Play
Firstly, I'd like to apologize for posting this chart after the fact but I couldn't help it considering I just got back from my break on Friday night and started posting charts again on Saturday (yesterday). Under normal circumstances, I would've posted this chart well ahead of the entry zone as a bounce play instead of posting it now as a confirmation play....
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Price bounced off of the 0.9200 level on Friday, which is just below the intersection of the two upward trend lines and closed Friday with a hammer pinbar/doji. So this presents us with a confirmation (normally, I would use the word "possible" instead of "confirmation") long scenario for AUD/USD but I would wait for a retrace first before entering.
Reason being is because the proper stop loss for this trade should be set below the 0.9200 level. So to minimize your risk, wait for price to get as low as possible (e.g., retrace) before entering. My rule of thumb is 50-60% retrace of the wick of the pinbar, which in this case means an entry of 0.9230/40.
However, depending on your risk tolerance, you may opt for a lower entry depending on where your stop loss is. For example, I plan to set my stop loss at 0.9180 and risk 40 pips on this trade, which means I want a 0.9220 entry.
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Price bounced off of the 0.9200 level on Friday, which is just below the intersection of the two upward trend lines and closed Friday with a hammer pinbar/doji. So this presents us with a confirmation (normally, I would use the word "possible" instead of "confirmation") long scenario for AUD/USD but I would wait for a retrace first before entering.
Reason being is because the proper stop loss for this trade should be set below the 0.9200 level. So to minimize your risk, wait for price to get as low as possible (e.g., retrace) before entering. My rule of thumb is 50-60% retrace of the wick of the pinbar, which in this case means an entry of 0.9230/40.
However, depending on your risk tolerance, you may opt for a lower entry depending on where your stop loss is. For example, I plan to set my stop loss at 0.9180 and risk 40 pips on this trade, which means I want a 0.9220 entry.