Euro Trade Idea with a 'tradeCompass approach' to partial profit taking

SHORT Trade Plan for Euro FX Futures (6E) – 20 Feb 2025

tradeCompass Approach

While this is a short trade idea, we use the tradeCompass approach to provide partial profit exits for traders to consider, making this a specific case of a tradeCompass setup. Usually, in a tradeCompass, we define a bullish threshold, where if the price moves above it, we expect further upside and provide bullish profit targets. Conversely, if the price moves below a bearish threshold, we anticipate further downside and offer partial profit targets for short traders. In this case, since it is a short setup, there is no bullish scenario, but we do offer tradeCompass-like partial profit targets for the bearish move. These targets are based on a deep analysis of value areas, volume profile, and liquidity pools, where market participants and algorithms are expected to react.

Market Context on Euro Futures Today

Euro FX Futures (6E) is currently trading at 1.04470, and technical factors suggest a potential short opportunity at higher resistance levels. The plan aims to capture a downside move while maintaining a disciplined risk management approach.

Trade Execution

Short Entry Orders:

✅ Weighted Average Entry Price:1.0462 ✅ Total Position Size:6 contracts (Adjust as per your risk tolerance)

Risk Management

• Stop Loss:1.0493 (for full position)

• Take Profit Target:1.0280

• Risk-to-Reward Ratio:5.80

💡 If all orders are filled and the first take profit target is reached, move the stop loss to breakeven and hold 50% of the position for a swing short.

Suggested Partial Profit Targets for this Euro Trade Idea

In addition to the final take profit target, we are incorporating insights from the tradeCompass approach, which focuses on value areas, key price levels, liquidity pools, point of controls, and VWAPs. This approach helps traders manage risk and secure profits in stages rather than waiting for an all-or-nothing move. Traders enjoying a profitable short should keep an eye on the following partial profit targets:

1. 1.03955 – Value Area High of February 7th.

2. 1.03720 – Just above the Value Area High of February 12th.

3. 1.03525 – Just above the Value Area High of February 4th and slightly above the VWAP close of February 11th.

4. 1.03095 – Just above the Value Area High of February 3rd.

Do note that if you are swing shorting all the way to the suggested final target of 1.0280, expect at least a temporary bounce at these levels as previous profitable shorts will likely cover, and speculative scalp traders may take long positions. These price levels provide reference points for managing exits strategically.

Additionally, the suggested exit prices are placed just above reaction levels to account for minor slippage and price fluctuations. Use this as a guideline, a second opinion, and incorporate it into your own strategy with indicators and time frames.

The Bias on Euro is Bearish But We Wait for a Slightly Better Entry

📉 Bearish Bias: Short at key resistance zones with calculated risk. 📊 Disciplined Trade Management: No stop loss on early entries; final stop placed above 1.0493. 💰 Profit Optimization: Secure partial gains at the suggested key levels and adjust stops accordingly.

🔔 TRADE AT YOUR OWN RISK – Adjust position sizing based on individual risk tolerance and account size. This is not financial advice. Use this analysis as an orientation and make informed decisions accordingly.Visit ForexLive.com for additional views.

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tradeCompass Follow-Up: Eurotrade Idea (30-Min Perspective)

The first short attempt at 1.05395 did not succeed, as the stop was triggered. However, as expected, this key institutional resistance zone (1.05395 - 1.057) has since played a role, with sellers stepping in and the second short attempt proving more successful.

While tradeCompass primarily focuses on volume profile techniques—which helped identify this resistance area despite the initial stop—we can also complement this with more traditional technical analysis that a broader audience follows.

Looking at the 30-minute chart, we see an RSI bearish divergence, further reinforcing the likelihood of a downside move. This highlights how multiple analytical methods can align to provide a stronger conviction trade setup.

So even when the first attempt does not work out, tradeCompass remains a valuable decision-support tool, helping traders navigate liquidity pools and institutional zones effectively. Stay tuned for more at ForexLive.com