Price on the Gold v Euro or XAUEUR 2 Hour price action chart has now moved lower after firing off a super high probability pin bar reversal at the key daily level that I highlighted traders should watch for short trades in the previous trade setups post that you can read here Large Bearish Engulfing Bar Printed on Gold v Euro | 18th Feb 2015
In that blog post it was discussed how price had formed a large Bearish Engulfing Bar (BEEB) on the daily chart and that the engulfing bar had engulfed the previous two candles. The mid way of this engulfing bar was also a daily key area where price had paused and found support and this is where so often if traders are on their toes they can pick up high probability price action trades as price “flips” from support to resistance and vice versa.
Below are three charts, the daily chart showing the key daily level, the 1 hour chart and the 2 hour chart. You will notice that on the 1 hour chart price is making a 2 bar reversal rejecting the key resistance. This price action could have been used by itself to get into the short trade. I often like to blend candles together to form cleaner trigger signals such as the 2 hour pin bar reversal. You can read about how to blend and make any different time frame you want in MT4 such as a 2 hour chart with the tutorial below;
Using the MT4 Indicator to Make Different Time Frames
The major factor in this trade and the one recurring factor in high probability setups is the price action story and WHERE the trades are being played from. Don’t get sucked into just looking for a pin bar or a 2 bar reversal and thinking these will be enough because they are not. The key with this setup is the daily level and then moving down to the smaller time frame, but still using the daily level to find the price action to match up. Read more about this in the lesson;
Ultimate Guide to Support, Resistance and the Price Action Story
and if you have any questions just put them below in the comments section.
PS: Keep an eye out over the next couple of days for a really cool lesson and something else that will be super exciting for you!
Gold v Euro Daily Chart
Gold v Euro 1 Hour Chart
Gold v Euro 2 Hour Chart
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