Catching a Bearish Wave with EURAUD Short Trade!
Currency Pair: EURAUD
Trade Type: Short (Sell)
Entry:
Entry Price: 1.65365 or Current Market Price (CMP)
Take Profit 1: 1.64714
Take Profit 2: 1.62491
Stop Level: 1.65979
Risk-to-Reward Ratio (RRR) 1:1 for the initial Take Profit level, and 1:4.68 for the second Take Profit level.
Risk per Trade: 1.00% of the trading account
Trade Rationale and Technical Analysis:
The trade idea is to go short (sell) on EURAUD based on technical signals observed on both the daily and 1-hour timeframes.
Double Top on Daily TF Frame:
A double top is a bearish reversal pattern that forms after an uptrend, indicating a potential trend reversal. It occurs when the price reaches a resistance level twice, fails to break above it, and starts to decline. The double top on the daily timeframe suggests a possible weakening of the bullish momentum and a potential shift towards a downtrend.
RSI Divergence on 1 Hour TF:
The Relative Strength Index (RSI) divergence is a technical signal that occurs when the price makes a higher high, but the RSI indicator makes a lower high (bearish divergence) or vice versa (bullish divergence). In this case, a bearish RSI divergence on the 1-hour timeframe implies that the recent price highs are not supported by strong buying momentum, indicating a possible reversal to the downside.
Rising Wedge on 1 Hour TF:
A rising wedge is a bearish chart pattern characterized by a contracting price range between upward sloping trendlines. This pattern suggests that the buying pressure is weakening, and a potential trend reversal is likely. The rising wedge on the 1-hour timeframe supports the idea of a bearish move in the EURAUD pair.
Trade Execution and Risk Management:
The entry price is set at 1.65365 or at the current market price (CMP). Two take profit levels are specified: Take Profit 1 at 1.64714 with a 1:1 Risk-to-Reward Ratio (RRR), and Take Profit 2 at 1.62491 with a more favorable 1:4.68 RRR. The stop level is placed at 1.65979, providing a 1:1 RRR as well.
The risk per trade is defined as 1.00% of the trading account, which helps limit potential losses in case the trade does not go as expected.
Note:
Trading in the forex market involves risks, and technical analysis is not guaranteed to be accurate all the time. It is essential to stay updated with market conditions, monitor price movements, and be prepared to adjust or exit the trade based on changing market dynamics. Always use appropriate risk management strategies and never risk more than you can afford to lose.
Trade Type: Short (Sell)
Entry:
Entry Price: 1.65365 or Current Market Price (CMP)
Take Profit 1: 1.64714
Take Profit 2: 1.62491
Stop Level: 1.65979
Risk-to-Reward Ratio (RRR) 1:1 for the initial Take Profit level, and 1:4.68 for the second Take Profit level.
Risk per Trade: 1.00% of the trading account
Trade Rationale and Technical Analysis:
The trade idea is to go short (sell) on EURAUD based on technical signals observed on both the daily and 1-hour timeframes.
Double Top on Daily TF Frame:
A double top is a bearish reversal pattern that forms after an uptrend, indicating a potential trend reversal. It occurs when the price reaches a resistance level twice, fails to break above it, and starts to decline. The double top on the daily timeframe suggests a possible weakening of the bullish momentum and a potential shift towards a downtrend.
RSI Divergence on 1 Hour TF:
The Relative Strength Index (RSI) divergence is a technical signal that occurs when the price makes a higher high, but the RSI indicator makes a lower high (bearish divergence) or vice versa (bullish divergence). In this case, a bearish RSI divergence on the 1-hour timeframe implies that the recent price highs are not supported by strong buying momentum, indicating a possible reversal to the downside.
Rising Wedge on 1 Hour TF:
A rising wedge is a bearish chart pattern characterized by a contracting price range between upward sloping trendlines. This pattern suggests that the buying pressure is weakening, and a potential trend reversal is likely. The rising wedge on the 1-hour timeframe supports the idea of a bearish move in the EURAUD pair.
Trade Execution and Risk Management:
The entry price is set at 1.65365 or at the current market price (CMP). Two take profit levels are specified: Take Profit 1 at 1.64714 with a 1:1 Risk-to-Reward Ratio (RRR), and Take Profit 2 at 1.62491 with a more favorable 1:4.68 RRR. The stop level is placed at 1.65979, providing a 1:1 RRR as well.
The risk per trade is defined as 1.00% of the trading account, which helps limit potential losses in case the trade does not go as expected.
Note:
Trading in the forex market involves risks, and technical analysis is not guaranteed to be accurate all the time. It is essential to stay updated with market conditions, monitor price movements, and be prepared to adjust or exit the trade based on changing market dynamics. Always use appropriate risk management strategies and never risk more than you can afford to lose.