If you trade on forex already then you probably heard of Dow Jones Newswires. These news are built-in my MetaTrader so I follow them. Often they inform that highest/lowest limit of the day has been reached. This information could help you to trade on the following correction.
For example you think that highest rate of the day already been hit and you sell with a small limit order. In this case stop order should be set just above your current highest rate of the day.
How to recognize that day's highest or lowest price already been hit? News can help you, but it's more interesting to try to find out them yourself. I would try to calculate the average move of the day based on history of the chart. It can be done simply by sum of the pips of previous 50 days divided by 50. That way you'll know that the price already moved at least the average number of pips. Next step is to look at the watches. Leave at least 2-3 hours till the end of the day to trade on reverse.
More than 90% of day candles have its shadows. You need to focus to enter the market when its on its boundaries. Lastly, make sure that there will be no major news for the current day. It is very important because the market can be waiting for them to make its move.
This method, however, is very risky. Try to combine it with other signals coming from other indicators.
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