Visual Analysis

The euro versus dollar breached resistance level for the descending channel that organized the bearish short term wave trades, where the pair stands at pivotal resistance 1.4360; representing the neckline for the bullish technical pattern, shown in the image above. The structure of this pattern makes us expect a bullish direction over an intraday basis as an initial bullish correction for the last descend targeting 1.4510.

EUR/USD Strategy: Short at 1.4881, Targeting 1.4422 Weekly Profit / Loss: +180 pips

I'm a bit fuzzy on 'Stops'. Not sure if it's covered later in class however I've only used 'Limits' during my time in the Demo environment thus far.When you place a 'Stop', do you give it an exact amount to stop the trade at? Or do you specify how many PIPs? You are correct...it will be covered later but just to provide you with an overview, take a look at the chart below... The black line labeled Entry represents the point the trade will be entered short. The pair will be sold at that point as it broke through a level of support. The Stop, the red line, will be placed just above a previous level of resistance. The Limit, the green line, will be placed at roughly double the amount of the stop so that a 1:2 Risk Reward Ratio is in place on the trade.

Too many times I hear about new traders opening a trade using the 5-minute chart (not my favorite approach) and when the market moves against them, they move to the 15-minute chart to justify staying in a little longer, hoping that the market will turn around.