I am still posting my forex trade videos regularly here in my YouTube Channel but it has been a long time since I have written an article about the ideas behind my trades. So in this post I will be writing a much detailed reason why I took this HEAD AND SHOULDER forex trade in the 4 hour time frame.
My 4 Hour Time Frame Forex Trading Strategy Set ups
If you read my previous trades and watched my videos, then perhaps you will now have an idea of what my forex trading strategies are using the 4 hour time frame. But for those who are new in this blog here it goes..
Combination Of Engulfing Candles and Pinbars that are formed in a key level
- This is just basically candles that engulfs or formed a pin bar at least 2 TIMES (the more the better) in a known support or resistance.
4 Hour Time Frame RSI Divergence
- In this strategy, I used the RSI Indicator as a guide to know if the current forex pair is forming a divergence movement.
Head and Shoulder Patterns in the 4 Hour Time Frame
- I think this is one of the most known forex trading set ups of all time because its very easy to recognize and trade.
-----------------------------------------------------------------------------------------------------
Recent Head and Shoulder Forex Trade in GBPUSD 4 Hour Time Frame
Let me share with you a winning trade that I had with the use of the head and shoulder pattern set up in the 4 hour time frame.
Based on my experience, GBPUSD is a good forex pair to trade when such pattern is forming especially if it occurs in the 4 hour time frame.
As you can see in the image below, the price came back to its previous resistance area forming the LEFT SHOULDER along the way and got rejected heavily as it tries to reach out more which then forms the HEAD.
By the time the price to move up again and almost leveled with the left shoulder, that's the time I took an entry. I know you might think its too early for me to take the entry but knowing that it is the GBPUSD which based on my experience is a good forex pair to trade when a head and shoulder pattern is forming I did not hesitate. Also, if you look at the charts regularly you will notice that GBP is really bearish this past few weeks.
I have my entry point figured out so I need to plan for my exit points.
My stop loss I placed just above the line of the resistance area that I plotted, while the profit target is placed right above the next support area where the price bounced.
My trade set up then look liked this:
Several candle had passed and it now looked like this below. By this time I was already confident that the HEAD AND SHOULDER formation that I was anticipating to occur would really materialize. The combination of bearish engulfing and bearish pinbar candles to me indicates that the bears have won.
I had this trade set up with a risk-to-reward ratio of 1:3. Since I am risking 200$, I am assuming that I would win 600$ if my profit target will be reached.
After a couple of days later, finally my profit target was reached which by the way is the last trading day of the week. I'm just really glad that finally its over and I can now move on again to find another profitable trade set ups.
This trade took several days before it finally reaches my profit target. I am no expert in forex trading, I also have losses but with a good trading plan and strategy I still managed to gain something from the forex market..
And with that let me end this article with this quote..
" Plan your trades, and trade your plans"
If you wish to watch the live video of this trade you can go to this link and watch it :)
And with that let me end this article with this quote..
" Plan your trades, and trade your plans"
If you wish to watch the live video of this trade you can go to this link and watch it :)
