In order to get the best trade parameters there are two things you first need to do.
You need to first ask yourself “Who is in control of price?”. It is a simple question, but essential. This is a question you need to ask yourself every step of the way when looking at potential reversal trades.
The second thing you need to do is look left. There is an entire history of price’s movement to the left of your screen – use it!
This will inform you on where the best placement for your trade parameters will be. Just remember though, recent data is king.
I am going to take a look at a very recent example in NZDUSD to highlight the reasons for my reversal setup methods – take a look