A EUR/USD Swing Trade That Is In A Profit Of 740 Pips!

We hope, you have read out last post in which we gave a detailed analysis of a scalping trade that made 400 pips. You must be wondering what makes us so good at making our trading decision that we opened a scalping trade and kept it open for two days to reap a profit of 400 pips. The truth is: the thing that makes us good is our multi timeframe approach. We always take a look at the M15, H1, H4, D1 and W1 charts on regular intervals. If we are trading on M15, we first check D1, H4 and H1 before we make our trading decision. So we already had this idea that the market is going to move big.  When we buy we make sure that the stochastic is oversold on all the above timeframe. In the same manner, when we sell we make sure that the stochastic is overbought on the above timeframes. Take a look at this screenshot.Swing TradeThis is the exact same setup that we had traded. In the last post we had analyzed this trade setup using M15 timeframe, now we will analyze it using the H4 timeframe that we mostly trade. You see we have a bullish divergence on the three indicators RSI, Stochastic and the MACD. We draw a minor trendline and wait for the price action to break it. The minor trendline is broken just after two candles and we get in at 1.27750 with out stop loss at 1.27500. Our risk is 25 pips. This time we have used the H4 timeframe for our entry.

As we have said in the previous post, when the FED Chairman spoke the market moved by more than 450 pips. We didn’t close the trade. As you can see EMA10 (red) is above EMA34 (yellow) which means that the up trend is strong. We opened a second position just above the red arrow in the above screenshot when the price touched EMA34 (yellow) and bounced up. The second position was opened at 1.30400. The stop loss was placed at 1.29900. The stop loss for the first position was also moved to 1.29900. So we have a profit of 215 pips on the first position. So if price action reverses and hits the stop loss we will be in a net profit of 165 pips.

We will continue in this trade as long as EMA10 (red) is above EMA34 (yellow). As you can see the uptrend is strong so we are in a profit of 500 pips on position 1 and a profit 240 pips on position 2 giving us a total profit of 740 pips. We will close this trade when EMA10 (red) crosses EMA34 (yellow) in the down direction or a bearish divergence pattern is spotted on H4 or D1. After reading this post, you should have a clear idea that it is always a good idea to take a look at the different timeframes before you make your trading decisions.

1 Comment

  • ken

    July 30, 2013

    That was a great article! Thank you!