The first trade I took this week came from a AUDUSD long. The reason behind this trade was a demand zone that had formed on the hourly chart. The plan was to wait for price to enter the demand zone before setting a buy stop at 0.72007 with my stop loss going below the demand zone and I was targeting 50 pips. The risk/reward was a decent 2.5.
Price initially reacted very well with the demand zone, popping out very bullishly from it. However price reversed and hit my stop loss. The reason for this could potentially be some short term resistance which price found hard to break through. In hindsight, I should have seen this and possibly adjusted my target, sacrificing my risk/reward.
This was my second trade of the week, which turned out to be a really nice winner. This was an inverse head and shoulders setup. The plan was to wait for a retest of the right shoulder (second arrow) and enter a long via a buy limit at 110.951. My stop loss went below the right shoulder and I was targeting 55 pips for a decent risk/reward of 2.75.
As seen in the second image, price reacted beautifully with my entry and rallied straight towards my target before reversing. My understanding of market psychology is the reason why I can effectively place my entries and exits. In hindsight this turned out to be a beautiful 55 pip and 2.75R winner.
This was a setup that was posted on our public Telegram channel, so it’s definitely good to see people making bank even from our free setups. The selling opportunity came from a bearish flag which price had formed in confluence with a supply zone. The plan was to wait for price to enter the supply zone before setting a sell stop at 80.383 with my stop loss above the supply zone and targeting 75 pips. The risk/reward was a decent 2.5.
In the second image, you can see price clearly rejecting the supply zone and my order got subsequently filled. Price broke out of the flag and went on to hit my target before reversing. Another beautiful proof that understanding market psychology is optimal for entries and exits.
The next setup I took was a long on USDCHF and the analysis behind it was a harmonic pattern in confluence with a demand zone. The plan was to wait for price to enter the demand zone before setting a buy stop at 0.97038, with my stop loss going below the demand zone and targeting 55 pips.
Price initially reacted well with the zone however could not sustain its bullish momentum and the sellers eventually took over and raced towards my stop loss. In hindsight, price may have already made its bullish move after the breakout of an inverse head and shoulders. Stopped out for a loss of 20 pips and 1R.
The last setup I took this week was a short on NZDUSD. The selling opportunity came from a supply zone in confluence with a bearish trendline. The plan was to wait for price to enter the supply zone before setting a sell stop at 0.6596, with my stop loss above the supple zone.
Price rejected the supply zone and my order was triggered and price hovered around for a day before making lower lows, further reinforcing the idea behind this trade. In this second image, I extended my target in view of NFP. There was a possibility of price either shooting up towards my stop loss or down towards my target, therefore I used that as a reason to extend my target.
NFP was positive for the USD and price dropped nicely and hit my target for a profit of 60 pips and 2.4R. Brilliant way to end the week. Well done to everyone in our Trading Room, enjoy your weekend traders!
Psst…we’ll even throw in a discount to get you started!