EURUSD Technical Analysis
EURUSD : Since the start of 2020 the pair has been pushing lower. Using trading filters/confirmations is key to determine and to signal a trader on which side to trade the market. Trading filters/confirmations are strategies used to analyze the market. A trader should never trade off one strategy and should always combine strategies together to get a better read of the market. Trading filters/confirmations allows a trader to trade only what “they” see and to trade with the momentum of the market. The charts below shows clearly how a trader could have traded/sold the EURUSD January 17/2020 breakout lower by using trading filters/confirmations.
EURUSD 1 Hour Chart 1.17.2020 : (Confirmation 1) Lower low/Lower High sequence confirming possible down trend. Price did not break above the 1.1205 previous lower high signalling the trend is still to the downside. (Confirmation 2) Bearish Flag Breakout Pattern formed signalling a break to the downside was possible. (Confirmation 3) Bearish AB=CD respects the pattern criteria signalling a move lower was possible.
EURUSD 1 Hour Chart 1.17.2020 : (Confirmation 4) Price breaks the Higher High/Higher Low sequence signalling a new trend to the downside has possibly started. (Confirmation 5) Price respects the 50 EMA signalling traders to watch for downside momentum. (Confirmation 6) Bearish Momentum Price Action Breakout Pattern is visible signalling traders to enter the SELL trade below the breakout level. Using trading filters/confirmations allows a trader to squeeze the trigger and enter the market with a clearer view of what the market will do. Currently the SELL trade has reached the 1:2 RR target and expecting for EURUSD to continue lower and hit the 1:3 RR or 1:4 RR targets.
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 Twitter for updates and questions> @AidanFX or chat me on Skype > EWF Aidan Chan
*** Always use proper risk/money management according to your account size ***
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