This is an updated chart.
Using the similar methods as before I used an engulfing candlestick to identify a suitable entry point. My entry point is 1.882, my stop loss is 33pips below the Doji which makes it 1.1828 and the target is 1% above the Doji, as I know the candlestick indicates a reversal. The distance between the Doji and the support line is 101pip. When divided by 3, this makes it (roughly) 33 pips. That is my stop order below my candlestick. My target is therefore 1% of the current price which makes it 1.2010.
We can see from the chart that this is above the resistance line, however due to the UK election, the political certainty this gives allows the price to reach and surpass the resistance line. However this is only a test. The price quickly decreases below the resistance line before increasing above when certainty is replaced with relief and price begins to stabilise.
Interestingly there is another engulfing candlestick which meets my criteria indicated. However, this would have meant my entry price would be 1.1828, this would have resulted in a huge loss as the market stabilised as my rule for stop orders would be too strict for this trade to continue.
Using the similar methods as before I used an engulfing candlestick to identify a suitable entry point. My entry point is 1.882, my stop loss is 33pips below the Doji which makes it 1.1828 and the target is 1% above the Doji, as I know the candlestick indicates a reversal. The distance between the Doji and the support line is 101pip. When divided by 3, this makes it (roughly) 33 pips. That is my stop order below my candlestick. My target is therefore 1% of the current price which makes it 1.2010.
We can see from the chart that this is above the resistance line, however due to the UK election, the political certainty this gives allows the price to reach and surpass the resistance line. However this is only a test. The price quickly decreases below the resistance line before increasing above when certainty is replaced with relief and price begins to stabilise.
Interestingly there is another engulfing candlestick which meets my criteria indicated. However, this would have meant my entry price would be 1.1828, this would have resulted in a huge loss as the market stabilised as my rule for stop orders would be too strict for this trade to continue.