We will be staying on the EURUSD 5 min Chart for explanations on how the movements of price can be explained for activ trade entries and management.
It is important as price developes during the trade session that active action is taken by the trader.
Price reversal patterns have to be acknowledged and a risk reward ratio has to be taken into account before pulling the trigger.
Therefore one should try to buy allways at support and sell at resistance.
One should take a trade if risk reward equals at least 1 to 1.5… at least.
Whenever possible if trading in direction of higher highs and higher lows or lower lows and lower highs if bull or if bear risk is taken out of the table.
The trader is also setting himself up to catch the bigger moves if taking trades in direction of the trend.
The two above charts provide essential information of price that if taken into account provide for several positive trade setups.
The challenge is for the trader to see these set ups while price is developing to place his or her trades.
Best of PIPS