I am reading 'Naked Forex' and have a question to a possible big shadow trade.
For that I have the follwoing EURUSD H1 chart where I like to hear your advise:
Chart (EURUSD H1):
The blue marked candle is the big shadow. Here I see all criterias met:
- high/low embracing the previous candle
- higher range than at least 7 previous candles
- sufficient space to the left
Therefore I would enter the trade with:
- buy-stop a few pips above the candle
- stop-loss a few pips below the candle
I have problems determining the take-profit, because normally I would choose the next zone for it (a few pips below). But as the price climbs for several weeks there is no such. Can I set the take profit at [ buy-stop + (buy-stop - stop-loss) ] or where would you suggest to set it?
I am glad for any ideas on trade in general or the take-profit determination.