Student’s Question: In the chart below I've decided to go long on AUD/USD. Todays candle wick is just penetration the lower bollinger band. I will wait to see if tomorrows candle confirms the reversal and moves up. I'll place a stop just below the bottom of today’s wick.
Power Course Instructor’s Response: While I can see your rationale, keep in mind that the primary tool in determining the direction to take a trade is the overall trend on the Daily chart. Taking a look at the Daily chart below, the prevailing trend is still to the downside. There has been a strong retracement recently but that trendline has been broken. While what you indicate could occur, at this point, the higher probability trades will be opportunities to short the pair.