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This is our previous post evaluation on the forex pair: Gbp Aud
Price has today broken the 365 moving average in the 4hr time frame and formed a price action pin bar (highlighted blue box) as seen in the chart below. With such scenario, good chance that price will continue its move up.
Just wanted to point our how we entered and exited on this trade.
We entered on the orange line (marked as entry). Our reason for entry was the forex price action pin bar off the 365 moving average and in confluence with the up trend as mentioned on the previous post.
Therefore we placed our stoploss below the pin bar marked as the red line. The stoploss is around 60 pips.
If you had taken the trade, we would have taken either full or partial profit right at the blue line 1.606.
The reason for taking profit at that area was that it was a previous support/resistance area.
Therefore our take profit target was triggered with a gain of 180 pips.
Hope the above quick example explains we trade price action with confluence, coupled with a good risk reward ratio of 1:3.
In our forex trading price action course, we teach the full forex system and strategies that allows traders to be consistently successful and profitable in forex trading. See you on the other side.
Asia Forex Mentor,
Ezekiel Chew
ps: Click the “like” button and drop a comment below. =)
Next Expert Article: Why not to trade without confluence
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James
January 17th, 2011 at 6:47 pm
Hi Ezekiel, can you show us how you derive the 1.60595 Take Profit level?
I can’t see this level on the H4 chart.
Thank you.
Ezekiel
January 17th, 2011 at 7:02 pm
click here to see the chart : forex trading strategy
You see i marked the area 1.60950. That is our area to look for.
But remember we always give price some lee way, there we would place our take profit at the highlight blue box marked by the high of the bar. That is our take profit area.
Ezekiel
James
January 17th, 2011 at 10:21 pm
So can I say that you spotted an opportunity to go long this pair on a timeframe (4h in this case) and your Take Profit level will be one timeframe higher – i.e. Daily in this case?
Or should the entry, stop loss and take profit levels be on the same chart as the chart where opportunity to go long is (4h in this case)?
Ezekiel
January 17th, 2011 at 10:58 pm
We used the top down approach in this case. We wanted to long this pair based on the daily chart. therefore we zoom down to the 4hr to see if there’s price action confirmation.
You can play by discretion on this pair. Our daily chart is a guide for our take profit area. Therefore we can use the blue box as a guide.
Other wise there are different ways to take profit. Eg. We can use a trailing stop method to place our stop loss at the 1.6 level. Therefore you would still have gotten profit if the you had set other take profit area.