EUR/USD offers a great opportunity to trade a beautiful candle showing a rejection in the upper part of the up-channel. Short-term trend is up and it is well represented by the chart pattern that we are studying, but long term trend is not so clear, in my opinion. Fundamentals are against EUR, recently. The setup of the moving average also slighlty prefers short positions. With this risk to reward ratio, it is definitely worth a try. Also, you can consider to have a first take profit at the bottom of the channel, while a second take profit as shown in the analysis, trading the breakout.
Trade active
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The pair has reached the bottom of the up-channel, so my suggestion is to start to take some profits now. Let's wait for today's action to see if we have a breakout, so we can continue make profits out of this trade.
Trade closed: target reached
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Take the profits at the bottom of the up-channel, before the weekend.
Nice idea as usual and "optimistic" TP , for me difficult to set a TP much below the bottom ..
FedericoSellitti
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Hi @chris_fx, thanks for sharing.
The idea is to take part of the profit at the bottom of the channel, while leaving the rest of the position trading the breakout.
Already at the bottom of the channel, we can remove part of the position, but I also suggest to wait for the breakout and see if selling pressure can give us some more profits :)
chris_fx
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@FedericoSellitti, ok but you could have the reasoning with all your positions, no? : one "reasonable" TP according the setup (here the bottom of the channel) and a 2nd target "if we are lucky" below the channel ? I do not understand what leads you to think we could go lower ...
FedericoSellitti
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@chris_fx, lucky? No no, luck is never a factor we consider in Forex Trading :)
If you had the chance to enroll in the Swing Trading course, this is something called "measured move".
A quick explanation about the logic. The up-channel shows a market that is in favor of buyers. They have a level to buy (at the bottom, pushing the price higher) and a level to remove their orders (at the top, in which usually we have less buying pressure and the price tends to retrace). With the price going below the level where buyers usually buy, not only it shows strong selling pressure, but there are many stop loss on buying orders triggered. Removing these orders from the market also means increasing the likelihood to have a further down-movement.
Hope it helps.
chris_fx
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@FedericoSellitti, :) I was sure the word "luck" would make you react :) . Joke aside. your explanation is crystal clear now . Thank you for taking the time to answer my question.
transparent-fx
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I made a breakdown as well for EU, this is what I have
Nice idea as usual and "optimistic" TP , for me difficult to set a TP much below the bottom ..