Phil’s Forex Blog

Watch The Direction Of Your Long Wicked Candles!

I got a question today about a candle that formed on a trendline on EURGBP.

The question was whether it matters if the long wick is on the top of the bottom of the candle.

Here’s the chart in question…

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Yes, it matters.

A long wick on a candle shows indecision by traders.  It’s formed (on an up candle) when price goes all the way up to the trendline, then bounces down because enough traders think the price is too high to continue trending up any further.

But that didn’t happen here.  There is no upper wick, so that second guessing didn’t happen. Most of the big players in the market are in agreement that price will continue to go up, so this is not the place for a short trade.

It’s now 8 hours after that candle closed, and price is still hovering around the same place. My prediction is that price will probably still go back down eventually, and only a little bit before shooting back up.

It’s certainly not the place for a reversal trade.

 

EURUSD Trade Closed For 2% Profit

I’m not liking the look of this trade, so I closed it out via TP at a 1:1 reward ratio level.

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I said from the start we needed to watch it closely, and I just don’t believe price action is strong enough for it to fall all the way below the current S&R level.

EUR/USD Trade Signal – Inside Bar Formed On An S&R Zone.

Because of Brexit it’s been 2 months since our last EUR/USD setup, but one finally formed.

It’s not the best setup, so I’ll be watching it closely and not taking any chances, but it’s a valid trade.

2016-08-19-eurusdecn

You’ll notice my stoploss is inside the S&R zone. I don’t really like that, but this zone is so wide I’ve decided to put the stop above the previous swing high instead of the S&R zone.

I’m only doing that because this trade is with the new trend. If it was against the trend I would NOT do that.  Also, the trade is based on an IB, which gives us a lower entry point.  That makes the trade harder to enter, so it will help confirm price has actually changed direction.

EUR/USD Trade Closed For 3% Profit.

This trade closed out in profit when it hit my modified stop loss.

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I figured it would, but losing 1% profit was worth the chance that it would break the IB and S&R zone and shoot up like a rocket.

Unfortunaly, that didn’t happen, but I’m still happy with a 3% account gain.

 

Moving Stoploss On EUR/USD Trade

Price shot up and stopped abruptly at the S&R zone.

We’re almost 4% in profit, so I’m going to move the stoploss to 1.1322 to lock in 3% profit.

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That gives me a 50/50 chance of either 3% profit or 4+%, and that’s a coin flip I can live with!