USDCAD DAILY CHART 12/26/2019
Price has bounced off a Swing Level as indicated by the Rejection Candle. A rejection candle printed at aSwing Level is a good indication a trade reversal downward is beginning. A bounce off a Swing Level is a good spot to enter a Short trade.
I have placed my Entry 2 pips below the low of the rejection candle. I want to make sure price makes a new lower low before entering this market.
I have placed my Stop Loss 2 pips above the high of the candle preceding the rejection candle. If this pair is ready to move lower then price action should print a lower high and the Stop Loss should not get hit.
I have placed my Price Target at the major support level for a nice 2:1 reward to risk ratio. Price action normally moves from resistance to support so I expect price action to hit my price target.
Once the Entry price is hit price should continue to make lower highs and lower lows and the Stop Loss should not get hit. However, if price is reversing upward then price action should make higher lows and higher highs and the entry price should not get hit.
I have placed my Entry 2 pips below the low of the rejection candle. I want to make sure price makes a new lower low before entering this market.
I have placed my Stop Loss 2 pips above the high of the candle preceding the rejection candle. If this pair is ready to move lower then price action should print a lower high and the Stop Loss should not get hit.
I have placed my Price Target at the major support level for a nice 2:1 reward to risk ratio. Price action normally moves from resistance to support so I expect price action to hit my price target.
Once the Entry price is hit price should continue to make lower highs and lower lows and the Stop Loss should not get hit. However, if price is reversing upward then price action should make higher lows and higher highs and the entry price should not get hit.
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Risk: 0.5%