Price Action roadmap for EU

FX:EURUSD   Euro / U.S. Dollar
564 8 9
Notes in chart
Comment: You may have to scroll the chart a little to read the full notes at the bottom (blue box)
Trade active: I posted this to the Forex chat but did not update our entry here. The 1hr timeframe gave us an inside bar followed by a break to the downside, right into its 20 period simple moving average. This made the perfect setup for a false inside bar breakout and our buy stop went above this candle with a stop loss below.
Comment: To clarify the previous update, we were triggered long above the green candle which is the inside bar. This was a relatively risky move from my perspecive as price was still trading in the middle of this range, which means that our position would be exposed to a high degree of volatility as both bulls and bears seek to take position with the expectation of a breakout in their perspective directions. We were fortunate enough to have a strong upside impulse after the formation of an additional indecision candle.
Trade closed: target reached: Our profit target has been reached but due to the continued upside momentum we've decided to leave 25% on the table to capture any additional upside. Stop loss on the remaining position will be moved up every two hours to below each 2hr candle as it closes.
Hi Dennis, a great insight, thanks! Do you think the EU will close the gap back up and then it will be a good time to sell? I'm always unsure when there is such a huge gap at the open!
dennis09 maksheetal
Hi, for the time being EU has fallen back outside of the triangle which was my expectation to retest the low that was created after the first breakdown. I still think this will happen, but need to see how the 4 and 2 hour chart closes and whether price will break the high or low of any signal bars given. The signal bars are the key for me. Based on the current 30 minute candles I do not see any signals to sell at the moment so it is entirely possible for the gap to close. Also keep in mind that the election is coming up, so this could have an influence on the market that we cannot predict to any reliable degree. Trade small for the next few days and be careful with your risk. Guarding your hard earned money comes before everything! And of course do not blindly follow anyone into battle, including me. ;) Best of luck this week!
maksheetal dennis09
Thanks Dennis, by signal bars, are you referring to PA 30 min candle? I have been trying to use the 1 hour candles as a signal to a direction move. I'm only trading a very small micro account at this stage as I'm still in a learning phase. The learning process feels never ending as I am continuously coming across new strategies that people use and ways to analysis! There should be a 3 year degree on this, maybe even 5!!
I really appreciate the help given by people like you. :)
dennis09 maksheetal
lol Agreed, and the learning never seems to stop! And by signal bars yes you are correct. But I typically use only 1 hour and above the same as you do. (Pin bar etc) When I doubt myself, feel confused or just need further confirmation I will increase the timeframe even higher and wait for the 2 and 4 hour bars to close and only enter once price has broken one of those bars just for an added piece of confirmation. Trading is more about stacking the probabilities on your side. So if we have strong resistance, a 4hr pin bar AND price breaks the low of this bar then all you can do is enter and wait it out while controlling your risk. BTW going lower than the 1hr is still a bad habbit that i'm trying to keep away from. :)
maksheetal dennis09
How long have you been trading? If you don't mind me asking?
Sometimes when you are waiting for a strong pin bar you feel like you're risking getting in at a good entry, hence going lower than 1 hour.
dennis09 maksheetal
Don't mind at all. I began blowing accounts in 2009 lol (hence the name) and it took me roughly 3 years to get consistently profitable trading the futures market. In hindsight I could've gotten it much sooner but kept making a few of the same mistakes over and over. For 2 years out of that time I stopped entirely. And I agree. Going lower than the 1hr was my way of trying to "get in early" and get a better position. Since I got a good position I would also use a bigger position size because I'd have a tighter stop. So part of it was greed. Sometimes it worked, but over time I would give back too much profits and overall I found it extremely frustrating. For me personally the lower timeframes are very good at tempting me into bad positions and the times that it worked just reinforced this habbit. Besides this, i've come to love not having to be glued to the screen all day and obsessing over the market.
maksheetal dennis09
Sounds like the kind of mistakes most traders make. I'm trying to trade higher TF too but because I don't move away from the screen I start to panic when the green goes into red although it is only part of the development of the trade. Am learning to be patient! Thanks for the info! :)
When I hear about how it was when someone started and now they are doing well, it gives me hope!! LOL
dennis09 maksheetal
Good to hear! Being super picky about your trades also helps a ton. As my old mentor used to put it: "Better to be out of a trade and wishing you were in, than in a trade and wishing you were out!" The market moves every week, no need to rush into anything. Catch you later.
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