There is a shooting star candlestick formation on the daily chart on the Usd/Chf. This candle signal indicates that buyers have temporarily run out of steam on the daily chart. If the current candle closes lower than the previous candle then that would be a great sell based on a price action strategy. A good place to put a stop would be above the daily high on the candle that has formed the shooting star which in this case is 1.1711. A potential target on Usd/Chf could be 1.125 because the 20 period moving average is at that current price level and many times the 20 period moving average acts as support when the price is in an uptrend.
Take a look at the daily chart to see what I am try to describe.
You can see that the price has stopped its rise rather quickly and that is why the shooting star has formed. I however like to wait until the next candle closes because that is a more solid indication that the price is changing direction. Even if I have found more confirmation I still always trade with only 1% risk on any one trade. That way I can have a large amount of gains while I am limiting my potential losses. Over time using a money management style like that will produce substantial long term gains. Don’t get greedy and one way to help yourself from getting greedy is to look at the big picture. What I mean by that is try to imagine how your account will look 5 yrs from now if you follow your trading plan.
Latest posts by casey (see all)
- Using a Forex Checklist to Develop a Good Trading Habit - September 25, 2017
- Learn why using a 2:1 Risk to Reward Ratio can increase profits - September 19, 2017
- My Personal Trading Plan Reviewed by Trading Expert Kim Krompass - August 4, 2017
Winner’s Edge Trading, as seen on: