Today we are looking at trading EUR/USD on the 4-hour chart. We have a potential Order block setup at play.
The daily time frame is still bearish but on the 4-hour chart, we may be able to start looking for some reasons to go long.
Before I get to the long order block entry, notice the short order block entry. Price spiked right into the zone and fell directly after piercing into this zone This was a fantastic short-order block entry. Well done to those of you that managed to catch that trade. The risk to reward was around one to six. However, I always take profits at one to two.
Now, let us discuss the possible long order block at play. I highlighted a yellow zone around the most previous bearish candle before we saw the price increase impulsively breaking through a previous line of resistance that was once support. This resistance flipped support flipped resistance is a nice added confluence that we can use to give ourselves more confidence as to where a possible target zone might be.
The entry would be in the middle of the yellow order block zone. We would want to see the price slowly come back into this zone as a possible retest, which would give us a clear indication that the price is simply back-testing certain areas of interest and collecting a lot of liquidity to push the price higher. This is where our order block zone sits.
Once the price comes down into this zone, our pending limit order will open up. Our risk to reward is a minimum of one to two with our stop loss placed a few pips below the bottom wick of the order block candle.
This is a swing trade, so remember, it can take some time to play out. It is only Monday and generally, the markets need a day to heat up after the weekends. Volatility can be expected since we are sitting at lows on the higher time frames. The bears will be wanting to continue possible short plays and the bulls will be looking for reversals and signals to jump into long positions. We can only trade the setups we see on the charts. So, let's ignore the noise around us and focus on the charts and the patterns that we see. Once we see a pattern that is formed with all of our rules in play, then we can jump into a possible position.
Good luck this week.
The Vortex Trader.
The daily time frame is still bearish but on the 4-hour chart, we may be able to start looking for some reasons to go long.
Before I get to the long order block entry, notice the short order block entry. Price spiked right into the zone and fell directly after piercing into this zone This was a fantastic short-order block entry. Well done to those of you that managed to catch that trade. The risk to reward was around one to six. However, I always take profits at one to two.
Now, let us discuss the possible long order block at play. I highlighted a yellow zone around the most previous bearish candle before we saw the price increase impulsively breaking through a previous line of resistance that was once support. This resistance flipped support flipped resistance is a nice added confluence that we can use to give ourselves more confidence as to where a possible target zone might be.
The entry would be in the middle of the yellow order block zone. We would want to see the price slowly come back into this zone as a possible retest, which would give us a clear indication that the price is simply back-testing certain areas of interest and collecting a lot of liquidity to push the price higher. This is where our order block zone sits.
Once the price comes down into this zone, our pending limit order will open up. Our risk to reward is a minimum of one to two with our stop loss placed a few pips below the bottom wick of the order block candle.
This is a swing trade, so remember, it can take some time to play out. It is only Monday and generally, the markets need a day to heat up after the weekends. Volatility can be expected since we are sitting at lows on the higher time frames. The bears will be wanting to continue possible short plays and the bulls will be looking for reversals and signals to jump into long positions. We can only trade the setups we see on the charts. So, let's ignore the noise around us and focus on the charts and the patterns that we see. Once we see a pattern that is formed with all of our rules in play, then we can jump into a possible position.
Good luck this week.
The Vortex Trader.