EURAUD pair has reached a daily zone that is a strong zone for sellers. In H4 time frame, there are zones in the same area where the price has broken through in the past. You may also notice your RSI indicator (if you do use it) also showing divergence in smaller time frames i.e. 15 min.
Good signs for a short position with a tight stop loss may give you 50 pips if price reaches 1.5860 or around that zone.
If it doesn't work then tight stop loss of few pips won't hurt your account much. I would suggest 20 pips stop loss to 1.5940 and a nice decent lot size that doesn't hurt your account may give you a return of 1:2 Risk to reward ratio.
Any suggestions or questions, feel free to post it in comments section.
Happy Trading!!!
Good signs for a short position with a tight stop loss may give you 50 pips if price reaches 1.5860 or around that zone.
If it doesn't work then tight stop loss of few pips won't hurt your account much. I would suggest 20 pips stop loss to 1.5940 and a nice decent lot size that doesn't hurt your account may give you a return of 1:2 Risk to reward ratio.
Any suggestions or questions, feel free to post it in comments section.
Happy Trading!!!
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I have taken the trade with a TP of 1.5830 as this number is where the previous trend line exists, which got broken by current circumstance. This line can be seen as the red line in the pitchfork drawn. So 1:4 risk reward ratio.