Let me show you how it all works yesterday by first looking at the main chart to identify the trend on the 30-min chart:
The red leading EMA indicators are well below the lagging EMA, colored here in gold. The immediate support level is at 1.55631. So I am looking to the price to break the 1.55631 to look for an entry. Once the price break this level just before the US NFP released, I will go to a 5-minute chart to determine my entry and my risk.
As it happen EURUSD break the 1.55631 support earlier during yesterday’s trade, and I immediately switched to 5-minute chart. When you look at the 5-minute chart below there are some opportunities to enter the trade. But from my experience, I discount that as false entry. Why? Remember the rules, don’t trade before the big economic news or else you will be eating up alive by the market rouge waves.
I only draw fib lines just before the news and place pending order only after the market making some wild moves. You can see it moves up wildly and down out of a sudden. If I enter early I will surely hit the stop loss point. With this technique never enter early. It is far much better to wait for a confirmation. Let the market settle and find it ways.
As always I make my entry at 38.2%, place my stop at 61.8% and set my target at least 3 times my risk.
And walaa! See how much the market can give me with this technique. It’s well over 41 pips from a risk of just 14 pips.