The market took its time to set up overnight amid a very light economic news schedule. The GBP looked good to the downside following two bearish candles with the second one being very wicky. By entering on the opening of the next candle , our reward to risk minimum of 3:1 to our Target 2 was available with a relatively small stop.
Entering near the middle of a range is not a favourite entry point, but a series of lower highs and 2 back to back bearish candles with the second one being very wicky coupled with a relatively small stop made this trade attractive. We anticipate that the trade will test and retest the Asian session low. We protect our trade accordingly by lowering our stop, now “take profit” – thereby removing the risk from the trade. Price moves down to our Target 1, and we protect this level and the trade is closed on the next candle. Price continued down without us to Target 2, pulls back, creates a higher low and the reversal move is under way.
Good luck with your trading!
Send any questions to Michael@privateforexcoaching.com