2 November, AtoZForex.com, Mumbai – It’s been a while since I last posted. The markets have been quite stodgy as there is pretty much sideways movement across major pairs. These are times when one needs to be extra cautious to time their trade as chances are you might get taken by one of those annoying pokies as I like to call them.
One thing which I always prefer as a trader is to minimize risk as much as possible and so should you. I have a live trade which I would be setting up today, as market opens as its drawing up quite nicely. It’s for XAG/USD. Let’s have a look at the charts;
The significant downtrend and the beautiful Pin Bar from last week testifies to go short.
As you can see I would set a Sell Limit order touching as may tails as possible of the earlier candles which would increase my chances of getting the order filled. It would also give me the liberty to set a SL much higher above the weekly PB to evade any false breaks and increase my risk: reward ratio, which if you see my take profit is more than 1:3.
Not only is it important to set a SL in the right areas but its also crucial as to where you set your TP. If you look closely I have placed the TP at a level where price has been able to reach in the past and more importantly there is no major support in between thus increasing the odds of price reaching the same level again.
Other benefits trading XAGUSD
The other thing I like about this XAGUSD live trade setup, is the initial congestion of daily candles followed by a nice daily PB.
It suggests 2 things:
1. Price is not able to break the level (Resistance).
2. A confirmation signal in the form of the daily PB which clearly stands out from the crowd, followed by the weekly PB.
That’s pretty much what I have for this week and I will keep up guys posted on this trade. Please feel free to post comments as I would love to hear from you!
Charts have life!
About the contributor
This article was written by Mandar Manik. He worked in the forex market for over 6 years as a Finance & Banking professional with leading investment banks.