Hello Forex Traders! I have a new trading example for you on the EURUSD chart. I managed to trade a bullish trend bounce on the 15 minute chart and to lock in some guaranteed profit. The fact that I adjusted my Stop Loss order above my entry point saved me from a big danger.
Signals of the Bullish Trend Bounce
- I spotted a Spinning Bottom candle pattern that appeared after a a price decrease.
- I spotted a Hammer Reversal candle pattern that came right after the Spinning Bottom.
- The price was actually testing a bullish trend on the 15-minute chart, which was the reason to expect another bullish trend bounce.
- The trend was getting tested for third time, which made me think that this might be a 5th Elliott Wave.
- Waves 2, 3, and 4 were responding to the Elliott Wave requirements.
Stop Loss and Targets of my Elliott Wave Trade
According to the Elliott Wave theory, there are two potential targets of Wave 5:
- At 100% of Wave 4
- At 161.8% of Wave 4
I put my Take Profit order at the bigger target (161.8%) in order to stay in the market in case of a major price move.
I put my Stop Loss order below the bottom created between Wave 2 and Wave 3 in order to handle eventual price extremes caused by high volatility.
Live Trading Example
Notice that the price increase came rapidly and I was not able to react with closing the trade near the first target. This is why I though it will be better to adjust the Stop Loss order on 6 pips profit and stay in the market for another impulse, instead of holding the trade as it is. This protected me from a bigger danger on the chart.
The United States announced a better than expected ADP Nonfarm Employment Change at this moment. The release was for 263K on a 187K forecast. This cased a very sharp price drop on the chart, which went below the purple bullish trend line. Fortunately, my adjusted Stop Loss order closed my trade on profit.
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