EURCAD has been having a strong Bearish trend on the H4 chart. The price has kept making lower lows. Yesterday’s daily candle finishes with a strong Bearish momentum without having any spike from the downside. Today’s first two H4 candles were held by yesterday’s Resistance level as well. If the Resistance level produces an H4 Bearish candle and later we get an H1 candle to make new lower low, then selling the pair would get us some green pips. Let us have a look at the H4 EURCAD chart.
The level of 1.48100 is the level of Resistance here. If we get an H4 Bearish Candle and an H1 Bearish candle closes below that H4 candle, then we should take a short entry right after that H1 candle’s closing. There is a lot of space for the price to travel. However, the price might start having some correction from the level of 1.47200. Let us have a look at the summary of the trade…
- Sell Limit: 1.48100
- Stop Loss: 1.48700
- Take Profit: 1.47200
- Validity: 72 hours
- Whenever possible, move the stop loss to the entry price and whenever you want, you can take profit anytime as long as you feel comfortable
As we see that we have about 90 pips range for the price to travel today. I assume our signal would be produced around at 45 pips below from the Resistance level. If that comes lower than that but the H4 Bearish candle is not that strong, then we might as well skip taking the entry. It would not offer us a good risk and reward ratio then.
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