Here is a trade opportunity for anyone who might be trading G/U. The set up is quite clear. You have a choice to take the trade blind off the line or wait to see market action on lower frames. Off the line provides you with a better entry, but the draw down is seeing market action develop. Either choice would be ok, just recognize that one is more aggressive than the other and thus needs to be accounted for concerning risk.
The Xs mark stop points. I think the further one is a better choice as it is below a swing point, but if you want to tighten your risk then use the upper X.
The point of exit will be about 5260 to 5375 depending on market action. If the trade fails then we will trade the short side after trade fail as the market sets up on resistance. We follow the same basic rules of price action and market price setting in order to recover our loss and make profit.
A buy would be with trend/market sentiment and would be at a critical point where we would expect buyers to be. We have an over all Higher High/Higher Low movement denoting that buy positions are more likely to be successful at this time over sell positions on the H1 frame. We MUST note though that we are trading the H1 against the overall D1 selling sentiment. So we must manage our trade accordingly. If our position is successful then at the profit taking point around 5260 as I noted before you will want to look to sell as that point is the topside of D1 trend resistance.
Since the H1 move is counter trend to D1 then a break of the trend line is going to cause us to be far more concerned than a break of a H1 trend line that is moving with D1 trend. So if the trend line on H1 breaks and we see price closes lower then we may want to at that point exit before our stop is hit to reduce loss. Our stop is in place so that disaster can’t strike at the occurrence of some unknown element that may occur (our internet connection going out, freakish global news that causes panic, etc.), but if we see the market setting up to move in the other direction then manually taking our losing position off the board would be appropriate. We don’t want to be fearful though, we want a reason to take the position off, not just because the trend line breaks. If the trend line breaks but we get solid closes above the line then we are seeing price action that could very well keep buyers on the hook and move the price to our target. These are some things that one needs to take into account when evaluating price action and determining if you should close or not.
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