AUD-USD Feb 4th
End of week price action for study purpose. Take Andrew's Pitchfork tool (insert tab of MT4). Plot requires click on 3 points. AUD/USD Daily:
1) Oct 15, 2010 High
2) Dec 21, 2010 Low
3) Dec 31, 2010 High
Now, switch this chart to 30-min interval, which is attached. We can see the pitchfork provide resistance at the 2 peak candles 01:30 and 14:00.
These 2 peaks also qualify as a BAJA divergence signal for a SELL. 15-min trigger entry at 15:15 open price 1.0171.
Fib Retracement Tool plot:
Low = Feb 2nd 17:00 low 1.0057
High = Feb 4th 14:00 high 1.0199
61.8 = 1.0109 (hit 1.0110 at 18:00)
Reward/Risk = 58/33 pips and ratio of 1.8/1
The risk/reward calculator can do the work for you.
If we want to be conservative, exit a portion or all of our position at the 38.2 fib of 1.0144.
As posted previously, there was a bounce trade opportunity (in between the 2 peaks). High was 1.0193 and bounce made it to the 23.6 fib of 1.0160 prior to exit ahead of NFP.
R/R very good on these trades. Be patient, learn how to identify, calculate R/R, and consider layered entry.
Last edited by fxbaja; 02-04-2011 at 08:15 PM.