EUR/USD has hit a resistance level nowadays and I decided to short it in the 2-min chart an hour ago, when the currency pair price hit the upper Bollinger Band. Keeping an eye on the hourly chart where daily pivot points are visible, I am targeting a bigger profit than the currently 40+ pips. I am looking at take profit exit point at around 1.38500 and having moved my stop loss at 1.39100, I have secured a risk-free trade which is very likely to end up quite profitable.
Forex trading is all about risking a little and winning the most out of your trades. This specific trade is the best example of this way of thinking by risking the minimum and going for the big win. Initially, I shorted EUR/USD while I traded the US stock market and set up a stop loss at 1.39500. While my possible loss would be about 10 or so pips, my profit target would be way more, since I believed the currency pair would drop below the very significant support level at 1.39250. Even if it didn’t, I could probably exit at breakeven if the signals were against me.
However the support level didn’t hold which led to a quick drop of the EUR/USD. I made about 40 pips in 30 minutes by this movement but I am not going to trade out just yet. In my opinion, I have entered in a very promising trade which I expect to make more than 60 to 70 pips if the pivot point at 1.38500 holds up. If not, sky is the limit since according to the daily EUR/USD chart there is a lot of room for retracement to the last months’ uptrend. On the other hand though, I do expect the support level to be very strong, since it is not only yesterday’s S1 pivot point, but it’s the actual support level when yesterday’s prices bounced off at that level.
I’m probably not typing very fast, as EUR/USD has moved below 1.38850 and I am now looking at 60+ pips profit. As the price is closing down to my profit target , I need a couple of confirmation signals to close my trading position. Forex trading is sure a fast way of making but also losing money. Minimize your losses and let your profits run, as it could be a dangerous investment tool if you are not careful and always listen to the market. It speaks through the forex charts!