After having defined the major support and major resistance lines on the monthly chart, and noting the major trend is upward, I have moved to the 1 hour chart to look for a Long trade setup.
On the 1 hour chart I noticed price has been in a trading range to the last 4 hours. I also notice price is above the 10 and 20 EMA's indicating price is bullish.
I have set my Long Entry at 2 Pips above the high of the trading range for a long entry on a breakout of the trading range.
I have set my Stop Loss at 2 Pips below the low of the trading range. When price breaks out price should not make a lower low so the stop loss should not get hit.
I have set my Take Profit for a 3:1 reward to risk ratio. Usually when price rallies it will not normally move more than what I can get with a 3:1 reward to risk ratio. So when the take profit is hit, and I take profit, I will then wait for a pull back to re-enter for a new trade. If I happen to be monitoring this trade when price action moves close too my take profit and I see price action once to continue higher I may adjust my profit target upward to catch more of the move. However, if I am not monitoring the trade then my Profit target will get hit getting me out of the trade for a nice profit. I will then re-enter at the next trade setup.
On the 1 hour chart I noticed price has been in a trading range to the last 4 hours. I also notice price is above the 10 and 20 EMA's indicating price is bullish.
I have set my Long Entry at 2 Pips above the high of the trading range for a long entry on a breakout of the trading range.
I have set my Stop Loss at 2 Pips below the low of the trading range. When price breaks out price should not make a lower low so the stop loss should not get hit.
I have set my Take Profit for a 3:1 reward to risk ratio. Usually when price rallies it will not normally move more than what I can get with a 3:1 reward to risk ratio. So when the take profit is hit, and I take profit, I will then wait for a pull back to re-enter for a new trade. If I happen to be monitoring this trade when price action moves close too my take profit and I see price action once to continue higher I may adjust my profit target upward to catch more of the move. However, if I am not monitoring the trade then my Profit target will get hit getting me out of the trade for a nice profit. I will then re-enter at the next trade setup.
Comment:
Stop Loss hit! Will now wait for next trade setup.