NZDUSD: Bears React To Weekly Resistance – Bearish Reversal Candle Forms
I was just walking down the beach when I got an alert from the battle station indicator that a reversal candle pattern had formed on the NZDUSD 4 hour market.
This chart was the topic of discussion in the war room today because price was testing a weekly resistance level this morning.
Now we’ve actually got the reversal signal which communicates the bears and now coming back into play and holding the market below resistance.
The tan box is the consolidation area the market has been ranging in, so two things could happen. The old range resistance may hold as new support, or the more likely scenario is we are going to see the market fall back in and test the bottom of the range.
The daily chart shows a very recent sharp, aggressive rally and is now very extended away from it’s mean value. This over extension scenario usually is follow by very strong reversal moves as the market corrects.
Best of luck on the charts everyone.
The Price Action Predicts the Move …
Sorry to my readers, I was very late to follow up on this trade as I developed the worst migraine of my life due to some virus I caught.
The trade worked out well, it even provided a retracement entry – giving price action punters the opportunity to get an extremely good entry price, with a high reward profile.
Lately I’ve seen a few other traders post up webinars and articles about risk reward being a ‘myth’.
It’s no myth, it’s a mathematical truth, and the truth is – if you don’t stay on the positive side of the risk/reward ratio, trying to make money on a long term basis, will put you ‘behind the power curve’, and damage your account.
This simple, straight forward price action reversal setup allowed a trader to make 6x on the initial risk. Think about that, if you keep your risk consistent, you could lose the next following 6 trades and still not lose money.
In fact, you only need to hit target on one of the next six trades to push your account even higher. Don’t the fool who risks way more than ventured to gain from a trade.
If would like to learn more about our high reward money management strategies, these kind of price action signals, or my battle station tool for mt4 which flagged this trade – check out our war room for traders.
Best of luck on the charts.
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