Live Price Action Trade Setup EURUSD | Feb 28th

EURUSD

To end the month off, I wanted to share a trade I did today on the EURUSD. This was a simple breakout trade that collected a 3:1 reward to risk trade in less than an hour. I’m going to briefly describe the mechanics of what I was reading in the price action, what key levels I was paying attention to, why I took the trade and exited where I did.

Looking at the chart below, starting at the top left from A to B, we can see an impulsive price action move controlled by the bears. This is followed up by the typical corrective price action from B to C, which then results in continued impulsive selling from C to D as to be expected. D to E is corrective, so I’m expecting the sellers to reject any pullbacks, which they do at E and F with the latter being a pin bar at the dynamic resistance and 20ema.

live price action trade eurusd $eur chris capre 2ndskiesforex.com feb 28th small

This makes a nominal new low at G, which forms a pin bar a the low of the day (to be noted for later). The buying that follows is mostly corrective, forming a double top at H & I at the lows B around 1.3133.

Now, one has to ask, if the buyers at G were really in control, would the large bear bar at I form which took out in 5 mins of selling the last hour of buying?

This should tell you who’s in control, so an attack on G should be next and a likely break below.

This happens about an hour later, and after a two pip break, I take a short at pt 1. This is based on the assumption that;

a) the overall selling pressure on the day will continue
and
b) stops will likely be tripped on this break below the daily low as the buyers from G are now getting stopped out

After a brief  rejection, the market submerges below the lows at G, and forms a textbook breakout pullback setup at J. Conservative traders not wanting to take the actual breakout, could have waited here and had almost half an hour at this level to take a short with several confirmations.

Typically, if I’m not already short at this point, when I see this kind of breakout pullback setup, I’m going to sell that. This is classic with trend trading.

At J, we can see with the large bear bar, that 5 mins of selling erases 25 mins of buying – communicating the sellers are still in control by sending the price lower.

I exited at pt 2, as this was a strong support level from the day before which one can see on the 4hr charts.

Total result is a 3:1 reward to risk play in less than an hour. Keep in mind a trader making 300 pips on 100 pips of risk made the exact same profit as I did. Food for thought, but I hope you enjoyed this lesson on just one of the methods I trade and teach in my price action course.

Kind Regards,
Chris Capre

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1 Comments

  • IvanFX - February 28, 2013 8:43 pm

    Wouldn’t have enough wall left in my house if I had to frame and hung all your first class articles Chris ;) Missed this trade as I am unable to trade off NA session from Asia. As text book as it gets. Aggressive play not waiting for the BOPB, but makes sense after reading the whole PA story ;)