I took this trade due to the inside bar on 30 minute chart.
Price was staying inside the band after closing outside of the band, and forming an inside bar.
We can see entry, stop loss, and take profit.
We can also see that I exited early, and the price action afterwards. A very nice short was available
1.4676 entry
1.4684 exit
A. This in an engulfing pattern after a close outside of the band. We should note that the candles are relatively large
B. The price went up against the short position (see the green dotted line – I did not have a stop loss order in). All I thought of was to draw a fibonacci retracement to see where price could stop. It closed above the 61 level but then moved down with momentum.
C. The green dotted line was a limit order to take profit which was filled.
D. Price went 10 pips lower.
Notice anything else? What can we learn?
Here is an example of a potential entry based on a fibonacci retracement (thin purple lines).
This is how the market looked at about 7 am NY time.
Targets were estimated based on the fibonacci expansion levels (thick black lines) of the same move.
The idea is that many times the 100 expansion level is reached.
As we talk more about bollinger bands, we’ll see that there was another reason for the entry, even if only for a quicker “scalp”
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