Today we consider EUR/USD currency pair on the D1 chart. In line with long-term bullish players (W1), there is a bearish momentum formation on the daily chart. Parabolic historical values are moving along the D1 downtrend line, confirming the market sentiment. Donchian Channel is also demonstrating the negative bias. The only alarming signal comes from the RSI-Bars oscillator: it indicates the sideways movement. The support breakout at 27.5216% may be considered as a confirmatory signal. It is expected to be preceded by a strong bearish momentum and the price level intersection at 1.21576. This mark can be used for opening a pending sell order with Stop Loss placed above the fractal resistance at 1.25768. This key level is also confirmed by ParabolicSAR historical values, the upper Donchian Channel boundary, and the D1 trend line crossing. We deem that the proposed scheme of risk management should be comfortable for conservative traders.
After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.
- Position Sell
- Sell stop below 1.21576
- Stop loss above 1.25768
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