WEBVTT 0 00:09.480 --> 00:12.780 Here we have euro-dollar on a one hour chart. 1 00:12.930 --> 00:18.830 The support that I have drawn in red is quite easy to see. At the beginning of the chart, 2 00:18.840 --> 00:26.430 the price goes there several times and we can see that this level always rejects the price. After the 3 00:26.430 --> 00:28.600 action in the first part of the chart, 4 00:28.800 --> 00:36.130 we can say that 1.0855 is a level where buyers find convenient to buy the couple. 5 00:36.230 --> 00:40.790 The demand always increases when the price is near that level. 6 00:41.250 --> 00:48.180 So what we are going to do is to study the price action when the market reaches that level again. 7 00:48.180 --> 00:49.260 Going on with the chart, 8 00:49.290 --> 00:56.160 the first time that we can start to study the candlesticks is here because the price is getting closer 9 00:56.160 --> 00:58.350 to our support. 10 00:58.410 --> 01:03.100 I wanted to zoom in so we can have a better view of the candles. 11 01:03.240 --> 01:06.510 What do we have right here on the support? 12 01:06.510 --> 01:08.420 We have a hammer. 13 01:08.430 --> 01:13.380 The lower shadow says that the price went deep into our support area, 14 01:13.530 --> 01:16.550 but then the price closed above the opening. 15 01:16.890 --> 01:23.040 So this is a good opportunity to get a long position and I'm going to draw my line that represents the 16 01:23.040 --> 01:27.110 entry level at 1.0860. 17 01:27.270 --> 01:30.910 Also, if we think in terms of risk to reward opportunity, 18 01:31.140 --> 01:33.300 this is a huge chance. 19 01:33.450 --> 01:40.260 We are very close to our support and we can place a tight Stop-Loss, playing with a risk to reward 20 01:40.270 --> 01:42.960 that is very convenient. 21 01:42.970 --> 01:47.650 Think of my suggestions I have given to you placing the Stop-Loss. 22 01:47.650 --> 01:53.030 I want you to place the Stop-Loss in an area that proves that your analysis was wrong. 23 01:53.550 --> 02:00.300 Our trading idea is based on the assumption that the support is going to hold and reject all the attempts 24 02:00.300 --> 02:04.810 of the sellers to break this area and push the price lower. 25 02:04.830 --> 02:11.610 So if the price goes below the support area, our trading idea won't be valid anymore. 26 02:11.820 --> 02:18.530 This means that we can place a stop loss right here below the support and you can see that we are risking 27 02:18.540 --> 02:20.370 about 25 pips, 28 02:20.490 --> 02:29.550 so I'm going to adjust the price at 1.0835 and colour the line in red. 29 02:29.550 --> 02:33.870 So for this trade we only risk 25 pips. 30 02:34.110 --> 02:42.420 Following my tips about the take profit, I want to place my line here, 50 pips above the entry level, in 31 02:42.420 --> 02:46.220 order to have a risk to reward of 1 to 2. 32 02:46.230 --> 02:49.840 Now, is this line too far from our entry level? 33 02:50.160 --> 02:51.320 I would say no. 34 02:51.480 --> 02:53.410 The price can reach this level. 35 02:53.490 --> 03:00.640 It was actually at that level 24 hours earlier. Is the price too close to the entry level? 36 03:00.960 --> 03:08.110 I would say yes this time. The chart shows that the price can go higher than 1.0910, 37 03:08.160 --> 03:14.940 so this time I'm going to increase my take profit and have a better risk to reward ratio. 38 03:14.940 --> 03:19.020 I place my take profit here at 1.0960. 39 03:19.170 --> 03:22.660 So 100 pips far from the entry point. 40 03:22.920 --> 03:28.390 In this way, I have a risk to reward of 1:4, that is pretty good. 41 03:28.490 --> 03:32.450 Let's go on with the chart to see what happens. 42 03:33.260 --> 03:36.740 Ok, so at the end we get our profit here, 43 03:36.890 --> 03:40.010 but let's analyze what happened in between. 44 03:40.400 --> 03:43.430 After the hammer, the price starts to go up. 45 03:43.460 --> 03:48.100 This is quite good because it means that the analysis was correct. 46 03:48.350 --> 03:51.560 Then there are several candles that push the price down 47 03:51.560 --> 03:57.410 and with this candle, we are very close to our stop loss. From one side, 48 03:57.410 --> 04:04.220 I would be worried at this point, from another side I have another signal right on the support. 49 04:04.220 --> 04:10.250 I have this bullish engulfing pattern that once again is confirming that buyers are stepping into 50 04:10.250 --> 04:13.570 the market when the price is around 51 04:13.570 --> 04:15.830 1.0855. 52 04:15.890 --> 04:19.480 Then nothing really happens till this candle 53 04:19.580 --> 04:22.950 that represents a turning point for this trade. 54 04:23.270 --> 04:30.950 The price finally goes up and leaves the support area behind. After this candle, buyers are completely 55 04:30.950 --> 04:32.470 in control of the market 56 04:32.600 --> 04:37.410 and nothing stops them from reaching the take profit that I have placed. 57 04:37.460 --> 04:43.760 Actually the action of the buyers is pretty strong and I would say that the price can go even higher than 58 04:43.760 --> 04:44.710 this. 59 04:44.930 --> 04:51.080 If we go on, we can clearly see that there was a chance to get an even better profit. 60 04:51.290 --> 04:57.200 But I can't really complain even if I missed the chance, it was anyway a good trade.