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EUR/USD 9 September 2019

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Basic Details Of The Setup

An inside bar is spotted on the 9th of September 2019.

09 Sep 2019 EU
Chart 1

The daily trend is very bearish. This pair is in the downtrend since June 2019. Given that the price is under the recent support-turned-resistance level, and it is under the EMA 20, it has given us a good signal that this pair will go further to the south.

Another good impression about this inside day setup is that the mother bar has formed a bearish pin bar and the tail touched the EMA 20. This shows that the buyers are trying to push the price higher but it is later controlled by the sellers. This is a good indication that the price is a strong bearish trend.

Detail about the mother bar:

High: 1.1085

Low: 1.1017

The range of the mother bar is 68 pips. It is higher than 50 pips and lower than 100 pips. Hence it can give the trade pretty much breathing room to play out.

Even though the market is strongly bearish, I have open 2 pending orders. The reason for this is simple. The inside day is formed near the nearest resistance level. When this happens, it has the potential to north or go south. So I set up two pending orders to let the market determine the direction.

My stop loss is 68 pips and $140 in the dollar value. So the lot size is 2.05 lot. (Instaforex has a different lot value than the standard lot. It offers $1 per pip for 1 Instaforex lot.)

The pending orders are:

Buy Stop 2.05 Lot @ 1.1085, SL: 1.1017, TP: 1.1221

Sell Stop 2.05 Lot @ 1.1017, SL: 1.1085, TP: 1.0881

Progress Of The Orders

Please click on chart 2 for a clearer image.

09 Sep 2019 EU 2
Chart 2

Day 1: 9th September 2019

I have spotted the beautifully formed inside day. I can say that it is a perfect formation. The sell stop order is triggered. So I closed the buy stop order. At the end of the day, I have a negative floating profit. Since it is a good setup, I am pretty convinced with the idea that it will move downward soon.

Day 2: 10th September 2019

Another inside day is formed. When 2 inside days are forming near each other, it probably is signaling that the market is temporary at a pause. There was not much movement. It closed the day with another negative position.

Day 3: 11th September 2019

The market has finally moved! And it is in the desired direction which is downward. This can be the beginning of the long-awaited bearish continuation. It gives me a more positive vibe about this setup. As I said, this is a perfect setup. The trade has a temporary positive floating profit for the first time.

Day 4: 12th September 2019

A huge movement for EUR/USD! It is because of the Monetary Policy Statement and ECB Press Conference for Euro. You can see that the pair was moving downward at first and then move north strongly and hit my stop loss. It is unbelievable how forex news can maneuver the forex market. Sadly, my journey for this setup has to end here.

Overview Of The Setup

I have prepared for you a bigger and clearer image for this setup. You can share it with your friends and ask them what do they think about it.

09 Sep 2019 EU Full Story
09 Sep 2019 EU Full Story

Conclusion

I have lost 68 pips which is equivalent to $139.40

EU 09 September 2019 Result
EU 09 September 2019 Result

I have learned a lot from this trade.

First thing is that even a perfect setup can also end up in a loss. It can be disastrous in the forex trading if we react to trading opportunities without a proper plan or system. In my case, money management has done its job. It has to salvage me from being super confident and open a bigger order that I shouldn’t.

Secondly, there is a lot of power in the forex news. High impact news can change the whole direction of the market. But with my purely mechanical trading system, I should not care too much about the news. It can go against my direction and it can as well go with my direction. I just want to point out that there are a lot of powers in the news.

I am very happy with this trade. It has taught me very well. Ok folks, till next post. Remember to share this post or comment if you like it.

Always there for the benefit of the traders,

Engedi


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