Trade rationale: There’s a head and shoulders pattern forming on the daily timeframe so I think that means the pair’s downtrend will resume soon. Euro zone also had weaker than expected PMI data a few days ago and I read that bond yields in some countries spiked lately, which suggests they could encounter funding issues later on.
Entry: 1.3200, then add every 100 pips.
Stop loss: Initial stop at 1.3300, then I’ll trail it by 100 pips as I add positions.
Reward-to-risk: It’s a potential 21:1 return, assuming the trade goes my way.
Target: My ultimate profit target is the previous low on the daily chart (1.2600)
Head & Shoulders, Trix about to shift downward, Stoch’s overbought, Fibonacci showing price to hold just around 50…yup, seems like a good opportunity to short
Hi guys and gals. New to all this and reading around a lot. One question. When you say “then add every 100 pips” with regard to the entry price, what exactly does that mean. Regards.
He means that he won’t put his full position into the trade right from the start, so that if he’s wrong then it will be a much smaller loss. He’s going to add more to his position every 100 pips so that if it goes his way he’ll have a much larger profit. It’s a pretty common risk reduction strategy.
Thanks megapronk. To be sure I have this correct, you enter with say 1% then if the trade goes your way add another 1% at 100 pip gain and so on. Is that correct???
However, on an unrelated note, I’ve noticed that this trade is getting dangerously close to the stop loss! (at least at 8:25 CST) and the stochastic is showing oversold on the 15 min. But I can’t tell if he’s gonna get stopped or not… if he doesn’t I might end up taking the trade at a better position than the original for some extra pips.
Yeah, I noticed that. I can’t tell if he just put the stop loss too close, or if the trade didn’t go his way. because right now it seems like it might turn around if you look at shorter term charts, like 15m, and the stochastic is pretty oversold too. I think there’s a chance this trade could still go his way, even after the stop grab.
German Business Climate and US Home Sales really kicked us in the balls
Seems like 1.34 is gonna get tested. Trix and Stochiastics on H4/D1 still suggest a reversal is about to happen…but it’s probably still too early to jump in. On shorter TF it seems there’s still some room for an upwards movement. Will try to enter at 1.34…
I actually see eu would go up, if you flip the image vertically you will see head and shoulders from 29-2-2012 ~ 23-3-2012, too bad our eyes is used to look up.
hello, im new to trading and I identified the possible head and shoulders, therefore im in a trade currently with my stop losses above the “supposed” head and profit point near the neck line region. However, i was adviced against doing so as I was told you can never know it is a head and shoulders pattern until it had already formed. Was I wrong to take risk like that? because I thought that you will never get to initiate trades and profit with this kind of mentality.
