Form my assumptions and experiences after price created bearish divergences signal there is a potential that price will move lower. To open position, we need to do 3 important things. 1. Identify types of Divergences. 2. Draw the channel to identify the proper entry price. 3. Choose the proper Risk: Reward which I prefer 1:2
1. Bearish Divergence (good to open short position). 2. Open the position only if the price closing below the channel I have drawn earlier. 3. I will put my stop loss under the recent highest plus 5-10 pips. With 1:2 Risk to Reward ratio. The target for this signal should be 1.6260.