Shorting AUD/USD on the basis of S&R !!
This trade is for Educational Purpose only.
The Goal is to highlight the importance of Support & Resistance zones (S&R) and how can Weak and Strong zones be identified.
Support & Resistance (S&R) can play vital roles when it comes to trading. Most traders use S&R in order to look for precise entries and exits.
The Pair has been Bouncing off from zone Marked in Red which acted as Support earlier. The Support was tested four times.. Soon it was broken with strong Bearish Candle. The more touches/bounces the Support zone had, the weaker it got and as a result it got broken. Often time Support acts as Resistance zones and Vice versa. It is important to note that S&R can act as a strong Confluence but trading just on the basis of it alone can be dangerous. Using other Confluences such as Market Structure, Divergences and Chart Patterns such as Double Top/Bottom are equally important. Since Trading is the game of Probability, it is Essential to have more than One Confluence.
The Trade Plan:
The trade plan is to Short AUD/USD, once it re-tests the broken support zone which is now likely to Act as Resistance.
Note: Take this trade after doing on your own analysis.
Target:
Target is set on the basis of Fibonacci Re-tracement which comes in between 0.618 & 0.5.
Stop Loss:
Stop Loss is simply set on the basis of 1:3 Risk to Reward Ratio.
Time Frame used:
1H
Analysis based on:
- Market Structure
- Support & Resistance.
- Fibonacci Retracement tool .. used for setting Target
This trade is for Educational Purpose only.
The Goal is to highlight the importance of Support & Resistance zones (S&R) and how can Weak and Strong zones be identified.
Support & Resistance (S&R) can play vital roles when it comes to trading. Most traders use S&R in order to look for precise entries and exits.
The Pair has been Bouncing off from zone Marked in Red which acted as Support earlier. The Support was tested four times.. Soon it was broken with strong Bearish Candle. The more touches/bounces the Support zone had, the weaker it got and as a result it got broken. Often time Support acts as Resistance zones and Vice versa. It is important to note that S&R can act as a strong Confluence but trading just on the basis of it alone can be dangerous. Using other Confluences such as Market Structure, Divergences and Chart Patterns such as Double Top/Bottom are equally important. Since Trading is the game of Probability, it is Essential to have more than One Confluence.
The Trade Plan:
The trade plan is to Short AUD/USD, once it re-tests the broken support zone which is now likely to Act as Resistance.
Note: Take this trade after doing on your own analysis.
Target:
Target is set on the basis of Fibonacci Re-tracement which comes in between 0.618 & 0.5.
Stop Loss:
Stop Loss is simply set on the basis of 1:3 Risk to Reward Ratio.
Time Frame used:
1H
Analysis based on:
- Market Structure
- Support & Resistance.
- Fibonacci Retracement tool .. used for setting Target