Set the order
- Pending buy @ 107.700
- Stop Loss @ 107.200
- Take Profit @ 110.00
- We can leave and forget our pending buy with some confidence due to the quality of the setup. This is a straight forward Fibonacci setup on a high timeframe, using a high timeframe adds weight to the price action described below.
- We can safely assume that the two significant levels required to draw a Fibonacci line have been printed... the low of 106.500 and the high of 109.500. I have the confidence to call the top because of a significant pullback.
- The 38.20% leg has already been fulfilled on the 14th @ 1400hrs. Following this, we haven't seen any momentum build to take price to new highs. So its likely that there is still significant selling taking place or there is not sufficient mood to drive the dollar higher just yet.
- This all means that the next calling point is likely to be the 61.80% . (This will be our entry point.) with stops places below 71.00% .
- With patience we will look to collect our profits on the first .
- With good risk management trading a small lot size you can risk less than 2% of your account (1.8% in my case), and look to collect over 8%! Remember that profitable forex traders on average only collect 20%-30% profit per year and this setup offers more than 25% of that in one trade.
For more setups like this one. Follow my new telegram channel t.me/smartmoneytrades. I have 11/14 trades profitable in the past two weeks, and over 16% account profit in that time.
Let me know your thoughts in the comments, even if you disagree.