Tuesday, April 21, 2015
89 Pip Eur/Usd Bearish Engulfing Candlestick Trade
The Head and Shoulders pattern can be very profitable when combined with certain candlestick bar formations. This EUR/USD trade I took yesterday is a good example of this. I noticed that a bearish engulfing bar had formed at the right shoulder and entered a short trade (Greed Arrow). I picked the 1.07(Orange Arrow) price level as my profit target. The 1.07 level acted as support on the 16th and it is also a round number. The stop-loss on this trade was initially set @ 1.07891, which is just above the high of that bearish engulfing bar(Green Arrow). The risk was about 30 pips, and the trade closed with an 89 pip total profit, so almost 1:3 risk-to-reward ratio.
