![]() ![]() There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Impulsive traders will find such scenarios very tempting to jump into the trade, ignoring the rules Sometimes, despite all the criteria being met, price does not retrace and continues to rally, which could result in a missed opportunity.Trade set ups do not occur that frequently, so traders looking for make quick trades will find this as a disadvantage.The disadvantage of using this trading strategy includes: The trading strategy is very objective but requires a bit of practice to identify the trade set ups.Because the strategy is based off H4 chart interval, the average holding period for the trades can be between a few days to a week at the most.The in-built risk management means that all the trades come with a minimum of 1:2 risk/reward trading strategy.Using the two moving averages and entering after the trend is established offers a low risk trading strategy.The advantage of using this trading strategy can be summarized into the following: When price travels the same distance as the entry to the low price, the trade is moved to break even or closed partially, with the final target in place.From entry, the projected target is 1.5 times the distance of entry to the low (which is also where the stops are placed).Stops are placed at the previous low as it is the only visible stop level that we can see. ![]() Price then rallies breaking above the previous high to make a new high and retraces back towards the previous high, which marks the buy order entry.In the above chart, price makes a high at 1.09461, above the 50 and 200 EMA and then drops to make a new low at 1.08422.The chart below illustrates how the buy trade set up is identified. Measure the distance of the high to low and project the distance 1.5 times from entry.Place a buy order at the previous high with stops at the most visible low.Once price breaks the high, wait for a new high to be made and price starts to retrace back to the previous high. ![]() Using the horizontal line tool, mark the high point before the retracement low.Price must make a high and then retrace back to make a low but stay above the 50 or 200 EMA.Price must be trading at or above the 50 EMA.Stops are placed at the visible high at 0.84652.We now place a sell order at the previous low of 0.84088, with break even target of 0.8028 and the final target at 0.82498.Price then drops below the previous low and declines further to make a new low.Projecting this from the possible entry of 0.84088, the final target we get is 0.82498 We now calculate the final target which is 0.0106 x 1.5 = 0.0159. Price makes a new low at 0.84088 below the 50 EMA and then retraces back to the 50 EMA making a new high at 0.85148. ![]() The chart below illustrates how the sell trade set up is identified.
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