DAX (Germany 30) Trading Setup

by: Colibri Trader

Dear traders,

The last two trade setups were not the best ones I have seen. The crude oil setup did touch the first target, but then it was rejected by it. From 45.80 oil has gone all the way up to 48.60. The other instrument I was watching for a potential short entry was AUDJPY. The daily candle was an evening star pattern. The pair did actually form an intraday setup to confirm the daily one. Unfortunately, it did not hold and has started reversing. I had an open position, which I have already closed, because I believe I might have entered a bit too early. No matter that AUDJPY has not touched its stop-loss, I lost confidence in the trade and decided to cover it up.

DAX (Germany 30) Trading Setup

Today’s trading setup is coming from DAX (Germany 30). That is an instrument I have been following for quite some time. You can see HERE my first post of a sequence of posts about it. Initially DAX formed a bullish pin bar two days ago, but I did not take it, since I believe that the overall mood has turned bearish here. That is why I was waiting for a bearish setup and it has started to reveal. There is a bearish rejection candles that formed on the daily timeframe. It looks like the bulls are starting to cover their longs. This coincides with a minor resistance area. Therefore, I will be looking for a potential short entry around 12280 and if price reacts rightly according to my intraday rules. If I initiate a short trade, I will be looking to place a stop-loss at around 12350. My first target could be around 12150. From then on, the next major support level is 12000.

Please beware that price might try to re-test 12350 one more time before diving. I will be extra careful around the open tomorrow morning.

Happy Trading,

Colibri Trader

p.s.

Check out my recent article on Contracting Triangles. I talk about different triangle patterns and how they can make you a better trader. Also, don’t forget to download the free spreadsheet, where you can see more real life examples of patterns and their outcome.

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