I am looking at trading the DAX today on the 4-hour chart.
We have seen nothing but bearish momentum and looking for a bullish setup right now is pretty risky. This is why I have decided to grade this setup ( as it is a counter-trend ) as a ‘C’ Grade setup.
Price has touched the bottom of the Bollinger bands and I am waiting for a bullish engulfing candle to show up with some strong bullish volume to accompany it. If we see close above previous candles taking out previous resistance with an engulfing candle, I will then place a fib retracement tool over the engulfing candle from the very bottom to the very top including the wicks. My long entry will be a pending order which will trigger once the price touches the 0.236 fib level.
If we get an entry, my targets would usually be the very top of the Bollinger bands. However, I am a conservative swing trader and I know this is a counter-trend trade so I am willing to take profits off the table once the rice reaches the middle Bollinger band.
As this is a counter-trend setup, I am only looking at a risk to reward of 1 to 1.5
I will also not be risking my usual amount. I will be risking less
Looking left, we can see that price is in an area that has been respected as previous support and resistance. This gives me more confidence and confluence that the price is going to be calming down for the time being and that it will allow us to look for some setups.
Hope you all have a great trading day.
See you on the next one
The Vortex Trader.
We have seen nothing but bearish momentum and looking for a bullish setup right now is pretty risky. This is why I have decided to grade this setup ( as it is a counter-trend ) as a ‘C’ Grade setup.
Price has touched the bottom of the Bollinger bands and I am waiting for a bullish engulfing candle to show up with some strong bullish volume to accompany it. If we see close above previous candles taking out previous resistance with an engulfing candle, I will then place a fib retracement tool over the engulfing candle from the very bottom to the very top including the wicks. My long entry will be a pending order which will trigger once the price touches the 0.236 fib level.
If we get an entry, my targets would usually be the very top of the Bollinger bands. However, I am a conservative swing trader and I know this is a counter-trend trade so I am willing to take profits off the table once the rice reaches the middle Bollinger band.
As this is a counter-trend setup, I am only looking at a risk to reward of 1 to 1.5
I will also not be risking my usual amount. I will be risking less
Looking left, we can see that price is in an area that has been respected as previous support and resistance. This gives me more confidence and confluence that the price is going to be calming down for the time being and that it will allow us to look for some setups.
Hope you all have a great trading day.
See you on the next one
The Vortex Trader.