On October 27 2022 the EURUSD pair entered a supply zone and reacted lower signalling a high probability SELL trade setup. On the daily chart, the pair has been trending lower making lower lows and lower highs. Traders should only be looking for SELL setups following the higher time frame trend and waiting for the lower time frames to align with the bearish momentum.
EURUSD Daily Chart October 27 2022
SELL Trade Setup (1 Hour Chart)
1. Higher time frame Daily chart is on a bearish trend sequence (Lower Low/Lower High)
2. Price reacting lower from the Daily Supply Zone (Grey Box)
3. Price breaks below the last higher low on the 1 Hour chart (Blue Line) signalling a possible trend change to the downside (ChoCh=Change of Character)
4. Price breaks below the higher low (Blue line) and pullbacks higher to the 1 Hour Supply Zone (Red) and triggers the SELL entry
EURUSD 1 Hour Chart October 27 2022
Price also reacts lower from the 5 minute time frame Supply Zone (Purple) inside the 1 Hour Supply Zone (Red) adding more confidence the pair would continue lower. Entered SELL entry at 1.0027 with Stop Loss at 1.0052. EURUSD moves lower and hits the 1:5 RR target for +125 pips (+5% risking 1% on every trade). Only time will tell if the pair will extend lower and hit the 1:10 RR target.
EURUSD 5 Minute Chart November 1 2022
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Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFX
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