Having to study more than one pair may translate into more
opportunities to trade good setups; it also means dividing attention amongst
the pairs, which in Forex where the market environment is ever-changing, may be
hard to do. For a couple of hours that I couldn’t keep up with the market’s
pace, I missed out of what would have been my best trade of the week – I spotted
it when it was out of reach. In a bid to prevent this from happening again, I
have resorted to cutting down the number of pairs I study. The ease with which this
setup would have been spotted and the returns which it begot compels me to
describe how I would have traded it.
Judging by price action on 4-hour time frame, it’s an
uptrend so I would incline to go long. Blue channel would have been drawn on 4-hour
time frame.
To get a better entry and for tight stop, 1-hour time frame
would have been consulted. The red bullish flag would have been spotted. On
testing the support of the flag, hammer formed. I would have entered immediately
after this development at 1.4204, set Stop Loss at 1.4168 (36 pips – below the
recent swing low), and target at 1.4338 (134 pips – resistance of the demand
channel).
It would have been easy pips.
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