Trade Recommendation: EURUSD

The Hammer candlestick formation on the Daily chart is a reversal signal. This means the market has exhausted its move to the downside when this candlestick shows up. In order to confirm this will hold and follow through to the upside, the more conservative approach is to enter the market when the price breaks above the high of the Hammer candlestick.

The market is closed until Sunday evening. Upon the open, if the market opens below Friday’s Hammer candlestick LOW, then cancel this trade.

If the market opens above the Hammer candlestick HIGH, enter at your discretion with a buy limit order of 1.2152 or BETTER.

If the market opens below the Hammer candlestick HIGH and above the Hammer candlestick low, then enter a buy stop entry order at 1.2132.

On all orders place the stop loss and profit targets as stated below.

Entry Price: 1.2132
Stop Loss: 1.2054
Profit Targets: First profit target 1.2203. Second profit target is 1.2285. Once the first profit target is reached, bring the stop loss to breakeven, then as the market moves higher, trail a stop loss on remaining position 35 pips behind to safeguard profits or until second profit target is hit.

Disclaimer: Disclaimer: The writer has no positions in the forex markets but does engage in short-term trading of forex and futures.

Featured image courtesy of Shutterstock.

I am the founder of VirtuesTrading.com, where traders can learn to use my Virtues Trading System. Formerly a Commodity Trading Advisor, I got my start in the Energy and Precious Metals Options & Futures pits of the New York Mercantile Exchange. I operate on the premise of efficient markets, the management of risk through the analyzation of price action and technical indicators. I have a BA in International Relations from the University of Southern California.