FX setup commentary 9 Aug 2012

Hey dude! Just want to share with you guys on the trade I placed today.

I just entered a short position on EURGBP currency pair in the afternoon when the candlestick closed. Please see the price chart below for the price action that convinced me to take this trade.

EURGBP - Daily chart

As you can see from the chart, it is obvious that the bias of this pair is bearish. Therefore, we should look for opportunity to short this pair. This pair has been in downward movement until a bullish pin bar was formed at 0.77600 (green line). Then the price was in retracement stage after the pin bar and it went all the way up and retest the resistance level turned from previous support level (yellow line). 

And it is up to my expectation where the price failed to break above the resistance level and it is at swing high of a major down trend. I entered short position without hesitation when I saw a bearish engulfing bar formed in this afternoon which suggests that the price is now ready to go down!!!

The setup of this trade is as follow:


Entry                :     0.78961
Profit Target     :     0.77800
Stoploss           :     0.79500
Reward            :     1,161 pipettes
Risk                 :     539 pipettes
R/R ratio          :     2.1

(Note: The above calculation not inclusive of spread charged by different brokers)