In today's blog post I want to discuss a trade that I opened yesterday on the EUR/USD pair because this is a classic example of a high probability set-up. It is based on my 4 hour trading system (fill in the form to the right for more details) and resulted in a quick and easy profit, with minimal risk.

First of all let me show you the 4 hour chart of the EUR/USD pair:

I was looking to open a long position on this pair (because I've been talking about this pair being oversold for weeks now), and was waiting for the EMA (5) to cross upwards through the EMA (20).

This actually happened yesterday morning and that would have been enough for me to enter a long position soon after the crossover bar closed. However what gave me added confidence and indeed the reason why I decided to open a maximum position (which for me is 5% of my capital, based on a stop loss of 40 points), was the fact that we had perfect divergence patterns on both the Smoothed Repulse and MACD indicators (including the MACD histogram).

I normally just use the Smoothed Repulse indicator and see if it crosses through 0 at the same time as the EMAs cross over, as this is a very positive sign (and indeed it did do on this occasion). However the two divergence patterns on both this indicator and the MACD was evidence that this was a very high probability set-up.

Therefore I went long at 1.3480 soon after the crossover bar closed, expecting a strong move upwards. I actually thought this had the potential to reach 1.36 fairly comfortably but after closing half the position for 50 points, like I always do, and moving my stop loss up to break-even, I was stopped out early this morning. Nevertheless despite not reaping huge profits, it was still a very profitable trade, particularly as I traded a maximum position.

Anyway the reason why I posted this EUR/USD trade on this blog was just to show you what a high probability trade actually looks like because I'm always using that particular phrase in my articles and blog posts.