Below I talk about a forex trade setup forming on AUDJPY forex pair. The market has formed 2 inside bars, and 2 pin bars, forming confluence of factors to support my views for a move to 78.15 area. Trade offering risk reward of around 3 to 1.
Video Synopsis - Forex Buy Signals Setup on AUDJPY pair
We are looking at the AUDUSD daily candle stick chart in this video and are going to walk through an inside bar / pin bar forex price action signal trade setup. We can see the 0.7406 level was previous support that was broken; price subsequently reclaimed this level and pushed up through it, which was an important event.
WE can also see an important level at 0.7837, it’s a swing point that connects two previous highs. So we have upside potential towards 0.7837. We have added confirmation via two consecutive pin bars that were also both inside a mother candle. This is called an inside bar / pin bar combination setup. There was also a false break event that formed a few days earlier that helped push prices higher.
Our stop loss on this setup would be around 100 pips and the upside potential would be over 300 points, this is how professional traders look at the market; analyze levels, look at the price action signals, nice tight stop and nice wide profit target. This is called risk to reward, when we have our risk tight and our reward high, we have a solid trade setup, especially with the signals and momentum in our favor.