Now to go on to that engulfing pattern trade!!
We had just finished a pips first trade with 45 pips gained.
So now we look at the retraces on the next 5 minute Starc band chart which explains itself >>>
By
tymen1 at 2008-07-24
The end of the pips first trade is shown on the left and now we look for a retrace point from which to go
long.
This means we look at the lower Starc band.
The Starc is going level at this time, therefore a retrace will occur near or on the lower Starc.
We have favour in finding such a point at price 14.
It is shown in blue.
At this point we enter with
2 amounts.
With the Starc bands level, we look for an exit near or at the upper Starc, and again we find favour with an exit touching the upper at price 32.
This is shown in red.
The black type shows the profit........32 pips!!
Add that to the previous and we get 77 pips.
OK, we did not take spreads into account and the fact that the trader will not necessarilly get the exact tops.
So lets drop the profit to, say, 60 pips.
That is still excellent for such a short period of work.
The next chart will show further retraces to complete the trade.