Dear Daily Price Action Setup Traders
The setup from last time is showing some signs of exhaustion. On the daily timeframe, there is a bullish rejection, and I have decided to close my long position. Sometimes, it is crucially important to cut your losers as early as possible if you see a troublesome signs or take a small profit. The point is to do what the market is showing and not become obsessed or too biased with your existing positions. Sometimes, I have found that exiting from a profitable/losing position early is a good sign. You have time to judge the position objectively and if that means that you have made a mistake, you can always re-enter in the same position or reverse if the market conditions have changed. The conclusion here is that you should not become too obsessed with your positions no matter whether you are making a small profit or a loss. Once you see that something is going wrong, just cut your positions and judge again.
Today’s daily price action setup is coming from the EUR/USD. It is in a major downtrend and the daily timeframe is showing some signs of renewed selling interest. There is a bearish engulfing pattern, which appears just after a small correction. This might mean one thing- more sellers to come along the way. My daily price action setup short parameters are:
I will be looking to sell EUR/USD at around 1.1340. The stop-loss should be placed just above 1.1540. The first target is the support level at 1.1080. Then, it depends on price action to see whether we should let the position run to the next target or take profits.