Hello everyone, I wanted to show you the third entry for the night time forex trading strategy. As you can see these entries are all price action so no need for guess work in terms of the signals. And as you know price action on the daily charts is the best intuition on the underlying market sentiment. The ensuing chart shows a bearish engulfing candle setup in the context of the EMAs all aligned down.
From the image you can see price retraced to the EMAs then a strong bearish engulfing candle occured. So that tells that sell momentum is in effect. So we get our fib tool and plot it against the candle. Stop loss is set at the 38% level, break even 200% level and take profit 261%level so no get work.
If you look to the left, the previous swing point was just at the 200% level so I had confidence to get in because if price stalled or reversed at the previous swing point at least I would have broke even and lock in 1/2 stop loss in profit.
Trade management for this setup was as follows. Stop loss 100 pips (38%), break even at 145 pips(200%) then at this point lock in 50 pips profit. Take profit 245 pips (261%) with gives a risk/reward of more that 1:2. Stay in the trade until either price hits the levels or price close above the 8 ema. Cool and simple no need for stress to the brain.
So here is the setups I use no fancy smancy crap just tried and proven price action setups that work over and over again. I just use them in the context of these EMAs to comfirm trend and price momentum. Of course you will win some and lose some. But I know you will win more than you lose and the risk/reward will take care of the profits.
So until next time happy night time trading.