So this is likely going to be my first 2BR trade come monday…
Pair: NZD/USD
Candlestick Pattern Identified: 2 Bar Reversal/Engulfing
A little issue though is I would have preferred the bullish candle close above the previous bearish candle open. Would you take this as a valid trade based on the 2 bar reversal pattern?
Hope you guys are getting ready for a green week ahead 
I think the green body should engulf the red one. Or better still the green body should engulf the entire red high to low. Then the close of the green should be preferably be higher than the highest point of the red candle. However, it seems to be at a strong support level with good hope.
Beware of relying on candlestick patterns in forex. Many candlestick patterns rely for their definition on close-to-open gaps, which are rare and very small in forex, whether intra-day or on daily charts.
A bullish engulfing candlestick should open lower then the prior close and close higher than the prior open. so its body should engulf the prior candle’s body, which this doesn’t. In fact it is hard to find a true and strong engulfing candlestick pattern in forex as the open of the last candle is almost automatically the same price as the close of the previous.
However, this might be worth taking as a limited long as price seems to have found the bottom of a horizontal range and might move higher from here as in the past.
Never take a trade just because only one signal appears!
Thanks @Kashmaster for the heads up… no serious trader takes a trade based off of a single signal and neither do I. It’s obvious just looking at the chart that there are more than one signal, You’ll notice yourself if you spend just a couple of seconds looking at it…
The point however is if the 2 bar reversal up there is an A+ set up, that’s what we needed to figure out…
Watch that trade like a hawk because the 0.6720 price area has been tested more than 3 times.
Personally, I am cautious about playing bounces off of support or resistance after the 3rd test.
Some people seem to think that the more times a price level is tested, the stronger it is. I believe the opposite to be true. The more times a price level has been tested, the weaker it gets.
Also, that 2BR is not dangling out in the open…it could very well be a hanging man type formation. Which would indicate the opposite to a bullish pin bar as you might see it.
Monday’s are generally not the optimal times to trade either. They are characterized by low volatility and low ranges.
Better to wait for Tuesday to see how the market opens up. We might see a rejection of that first resistance at 0.6800, which is a nice round psychological number.
Good luck either way, anything can happen.
I got in at the “doji” at support and am currently in the green! We will see how it plays out though.
Good risk/reward keeps me stress free either way! 
I am gearing NZD/USD up for a short when I get a resistance level above 0.67730.
Good luck with this trade guys… I decide to sit this one out and watch from the sidelines… it’s neither a convincing enough Engulfing or 2BR on further perusal for me… doesn’t mean it’s not gonna work out though.
Hi
holidays:slightly_smiling_face: my dear…price could be drive by retailers, then…
I see a mayor support line coming from october thas cross the figure becoming a resistens above 0.67700
I am not real keen on the setup, sure from a reversal standpoint it is ok.
I see consolidation on the 200 SMA and resistance from the 20 and 50 EMAs respectively. There is some established prior resistance at around 0.67630. Like when you cross a road, always look left before you go!
I am also watching this trade, but I will wait for a break above the 50 EMA.
Stochastics and MACD are also looking favorable.
Happy Green fiends…
Close of the Bullish candle wasn’t strong enough for me which is a shame as its at a great level.
I’m still on hold…Patiently waiting for my 0.67770 barrier to be crossed. Upgraded it from previous 0.67730. Then I short. If it drops before it hits my target area, then I am ok with losing out on this one.
NZD consumer confidence was just released and it was worse than expected.
This was the catalyst that spiked the price down by about 100 pips in one minute.
Any stops losses resting below that support level at 0.6720 have been taken out.
I’ve taken profits now and will wait for a retrace before considering another short.
Technical analysis is only a small part of the trading equation. However, most traders spend most of their time on it…
A much bigger part of the trading equation is psychology and what the majority are doing.
Sell when everyone else is buying and buy when everyone else is selling.
A simple technique you can use is to try and Identify where a cluster of stop losses are likely to be placed. Then aim in that direction. You will usually find then just above or below recent highs and lows.
In other words, become a stop hunter.
Your TP should be the other traders SL. Remember, when you want to buy, someone has to sell to you. when you want to sell, someone has to buy from you. You want to make money on that deal.
I mentioned earlier, that the more times a support or resistance level has been tested, the weaker it gets. There is also, probably, a large number of stop losses placed on the other side
That is why I have taken profit there here.
Nice work @ProfitPotential… nice analysis there… we only find ourselves perpetually on the side of the losing majority when we don’t know what we’re doing.
I mentioned earlier that i was gonna be watching this one from the sidelines, looks like I made the right call in the end.
Sometimes though you can get your TA perfectly and still the market does its thing like we’ve seen here. If the Price action at that level had been convincing enough I would’ve taken the trade without considering fundamentals (only NFP gets my attention now), ofcourse I’d be out with a loss by now, but over ten similar setups I’ll have profited six times at least. Price usually tells us enough to be profitable, IF we manage to stay patient enough and only take the high probability trades.
Trading only on the higher TF’s and off of strong PA’s ensure most fundamentals are already discounted by price.
I hope y’all didn’t get hit on this one though.
Thank you and you are right.
There are many contradictions in trading. Even though you may know what you are doing, trades still don’t work out.
For now, I think this price spike has wiped the slate clean. The market has to play out some more (range and consolidate to recapitalize the price grid). Then it will spike in one direction or the other again to wipe that slate clean.
It is important to withdraw from the market from time to time so the ‘fog of war’ can clear. Then you can plan your next move with more clarity
This is gold right here, I used to suffer from a stronger urge to be in the market everyday than the urge to be profitable, or even the urge for capital preservation. Thankfully I think I’m well in the process of reversing the order of urges now.
The best traders aren’t the ones who can best read the market, they’re the ones who also have the strength to sit on their hands when they have little confidence in their biases. I hope to reach that level someday soon.
Appreciate your comments on this thread, I’m sure many will find it instructive. 
