AUDUSD - I'll be giving a breakdown here of AU. For people to potentially follow but mainly for new people to understand and not be intimidated by the charts.
Charting is the easy part to forex, the hard part is your mind and your risk control. Even though this trade looks spot on to me I'm still going to stick to my plan and use 1% risk on this trade. There is no point risking more of your account just because you have a nice setup. The market will do what it wants and you are only trading probabilities and having an edge over the market.
So this setup here starts with this bullish trend now being broken and us seeing a continuation to the downside. We can see price has started to make a slow and steady rally back up which is allowing me to add my fib into the chart and look at prior structure to see if we have more confluence. I have added some arrows to the chart to show you what I mean by adding confluence and finding structure. This gives me 3 confluences or reasons to enter this trade and sell the pair when/if price reaches my sell point. One we have the trend break and the price dropping. Two we have fib retracement off the 50% fib. Three we have the prior structure.
This is an ideal set up for me to get into the trade only when price reaches my entry point. If I was to enter now I would simply be gambling and guessing what as happening. Of course we are only guessing in what direction we expect the market to go but now we have analysed the pair and looked at what is probable will happen. We are accepting price will come back and then price should continue back down.
If you need any help, drop me a comment. Enjoy your weekend guys
Charting is the easy part to forex, the hard part is your mind and your risk control. Even though this trade looks spot on to me I'm still going to stick to my plan and use 1% risk on this trade. There is no point risking more of your account just because you have a nice setup. The market will do what it wants and you are only trading probabilities and having an edge over the market.
So this setup here starts with this bullish trend now being broken and us seeing a continuation to the downside. We can see price has started to make a slow and steady rally back up which is allowing me to add my fib into the chart and look at prior structure to see if we have more confluence. I have added some arrows to the chart to show you what I mean by adding confluence and finding structure. This gives me 3 confluences or reasons to enter this trade and sell the pair when/if price reaches my sell point. One we have the trend break and the price dropping. Two we have fib retracement off the 50% fib. Three we have the prior structure.
This is an ideal set up for me to get into the trade only when price reaches my entry point. If I was to enter now I would simply be gambling and guessing what as happening. Of course we are only guessing in what direction we expect the market to go but now we have analysed the pair and looked at what is probable will happen. We are accepting price will come back and then price should continue back down.
If you need any help, drop me a comment. Enjoy your weekend guys