A follow-up to the recent trade idea where we can now create a more detailed plan to seek a bullish setup.
Price has drifted lower in a corrective fashion and now the pair is firmly in my hotlist in order to take a bullish trade. H4 is on par to produce a Dark Cloud cover which may help create a deeper pullback towards the trendline where we will (hopefully) build a base.
Whilst the trendline has not yet been fully established with a 3rd touch we can begin to look for bullish setups above this anticipated trendline, with a view to place a stop below it.
My preferred approach here is to place a buy-limit somewhere within the green buy zone. If triggered (and successful) it can transform an ordinary 2:1 reward/risk trade into a 3 or 4:1 reward to risk trade. Of course the downside with trying to be so elegant with an entry is you risk the chances of not getting filled, or getting filled and being stopped out anyway. This is where you'd need to experiment so you are happy that the trade aligns with your own risk profile.
Another set-and-forget approach is to set a buy-stop above the current swing high to assume the resumption of the bullish move. This would require a much looser stop if you tuck it behind the trendline, but an alternative approach is for a tighter stop below the 107.5 swing low. Again this is for you to experiment with.
A 3rd approach (and one I use occasionally) is to buy live at market and place a stop, so you can then walk away knowing you have been filled and at what price you will be stopped out if the trade reverses.
CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.