EURCAD Entry and Trade Management (194 pips)

Each week I send my weekly watchlist to my community. This is EURCAD from March 29, 2020 watchlist. Although I use multiple entries I will only be showing how new traders on my team following the rules of my book should take a single entry and how the trade should be managed.

The Setup

Below is the setup that was sent to the team. Please follow along to see how the trade was taken and how it was managed.

Move 1

From the chart above we were waiting for a strong break of the low marked with green for us to sell. In this case, we got bullish movement, price formed a new Higher Low and a Higher High which would render the current setup obsolete. Below I will show you how you should’ve taken this trade.

Looking at the chart above you can see price made higher highs and higher lows so it would be crazy to take that same entry from the watchlist. The aim is to always get the best entry on a trade. The market made two new Higher Lows at HL2 and HL3. When price got to HH2 and confirmed the higher low HL2 I moved my sell-stop from HL1 to HL2 then price made a higher high and a higher low so again I moved my sell-stop at HL3.

Move 2

So picking up where we left off, so from sell-stop from its original position to HL2 then to HL3. Where it got triggered when price broke below HL3 and stoploss was at where you see the greyed out “Stoploss”.

So price went down to make a lower low (LL) then went up to make a Lower High (LH). After which then went down to create a Lower Low (LL) and only after LL1 was formed then and only then you would move your stop-loss to where you have the new “Stoploss” which is in yellow.

Move 3

Since we are already in this trade the only line necessary is the single bearish trendline which will be used to manage the trade. Please pay keen attention to the trendline notice the points I’m now using to draw the trendline. The highest point of course and also the next point labeled LH.

A new Stoploss has also been established so we are at our 3rd stoploss move and although the stop-loss still not in profit it’s at a better position than when we entered the trade. So the market has been trending down forming Lower Lows and a Lower High.

Move 4

So following along based on rules from the book. We are down to our 4th stop-loss. We can see the market making higher highs and lower lows.

Move 5

We now have a second trendline because price has moved away from the first trendline. But follow with the Lower Highs and Lower Lows been formed. We are now down to our fifth (5th) Stoploss. For those wondering yes LH5 could have also been a stop-loss point.

Stopped out at 194 pips Profit

So price came back and would’ve stop us at around 194 pips in profit.