Hey Traders, We have a couple trades based on two different Strategies lining up at the same time. Both Strategies agree with each other and I believe this may be a good short term swing trade opportunity! I have been keeping an eye on the Dollar Index 0.07%waiting for a Bullish Cypher Pattern Completion on the Daily Chart . There are many ways to play this trade however I would not take ANY trade unless you have thoroughly back tested that particular strategy to figure out where the best Entry, Targets, and Stops should be.
I have 2 examples of how this trade can be taking. A conservative trader may choose to take this trade at the . 786 Retracement of the X to C leg ( Cypher Pattern Completion), whereas a more aggressive trader may choose to take this trade at previous structure to avoid the possibility of there entry order not getting filled.
Taking an aggressive entry on this trade will make your Risk/Reward a little smaller (Closer to a 1:1)
I have personally decided to take an aggressive entry on this trade, keep in mind that I have done extensive back testing for my strategies and my position size is large enough to allow me to take this setup. I will be looking to take 50-70% of my trade off the table to lock in profits at Target 1 for the Cypher Pattern . I will then be rolling my stops to near break even for the remainder of the trade. I will be sure to update this idea to keep you informed on how I am managing my position.
REASONS FOR ENTRY:
1) Cypher Pattern Completion (technically the Cypher pattern does not complete until the . 786 Retracement but this meets my conditions for entry, derived from back testing)
2) Previous Structure Resistance , looks to be holding as support with some buying at that level (highlighted in yellow)
3) Price is sitting on the 200 Period SMA and could serve as extra support as well as initiate some buying to get us the bounce we are looking for.
4) Price has closed outside of the bottom Bollinger Band several times on the daily chart (Shown below). Please check out my other idea that was recently posted called "Bounce coming in Gold -0.18%and Silver?" to get a better idea of what a close outside of the Bollinger bands may mean along with more details on how to use it (link to idea below)
5) We have a "oversold" Stochastics indicator which doesn't necessarily mean price will reverse as I have also explained in previous ideas however it is another factor.
I would like to see a nice strong green candle close inside the bands however I am prepared for a little more down side. I will also be using the precious metals price action to help manage the position. Feel free to comment below and good luck trading!
I have 2 examples of how this trade can be taking. A conservative trader may choose to take this trade at the . 786 Retracement of the X to C leg ( Cypher Pattern Completion), whereas a more aggressive trader may choose to take this trade at previous structure to avoid the possibility of there entry order not getting filled.
Taking an aggressive entry on this trade will make your Risk/Reward a little smaller (Closer to a 1:1)
I have personally decided to take an aggressive entry on this trade, keep in mind that I have done extensive back testing for my strategies and my position size is large enough to allow me to take this setup. I will be looking to take 50-70% of my trade off the table to lock in profits at Target 1 for the Cypher Pattern . I will then be rolling my stops to near break even for the remainder of the trade. I will be sure to update this idea to keep you informed on how I am managing my position.
REASONS FOR ENTRY:
1) Cypher Pattern Completion (technically the Cypher pattern does not complete until the . 786 Retracement but this meets my conditions for entry, derived from back testing)
2) Previous Structure Resistance , looks to be holding as support with some buying at that level (highlighted in yellow)
3) Price is sitting on the 200 Period SMA and could serve as extra support as well as initiate some buying to get us the bounce we are looking for.
4) Price has closed outside of the bottom Bollinger Band several times on the daily chart (Shown below). Please check out my other idea that was recently posted called "Bounce coming in Gold -0.18%and Silver?" to get a better idea of what a close outside of the Bollinger bands may mean along with more details on how to use it (link to idea below)
5) We have a "oversold" Stochastics indicator which doesn't necessarily mean price will reverse as I have also explained in previous ideas however it is another factor.
I would like to see a nice strong green candle close inside the bands however I am prepared for a little more down side. I will also be using the precious metals price action to help manage the position. Feel free to comment below and good luck trading!
Comment:
Please disregard the second paragraph of this idea as that was a mistake. I Published this same idea twice with two different trade setups. This idea is showing my Entry, Targets, and Stop for my Bollinger Band Strategy (I plan to share this strategy on tradingview in the future). Target 1 will be taken right below the 20 period SMA. If Target 1 is hit within a certain amount of time, I will only sell 50% of the position and roll my stops, I will then look for Target 2 right below the Upper Bollinger Band. I apologize for the error and if you would like to see the other idea related to this one, please click the link below (it has the same title as this idea). That idea is showing a Bullish Cypher Pattern. Thank you and good luck trading!
Trade closed: target reached:
Target 1 has been reached on the Bollinger Band Strategy trade. Target 1 was placed just below the 20 period moving average and pending sell limit orders are adjusted as the 20 period SMA moves. Entry for this position was around 99.30 while Target 1 was placed just below the moving average and filled at 100.60. 50% of the position was sold at Target 1 and Stops have been rolled to near break even. I will be looking for Target 2, just below the upper Bollinger Band however the Bands are beginning to point towards each other and when coupled with other factors, this is sometimes a good indication that a new move is about to occur. if I see a Strong selling candle then I may decide to close this position. I will keep everyone updated on the status of the trade. I am looking for 1 of 4 things to occur to help me manage my risk for target 2-
1- Price goes sideways, in this case I will base my decision on the next strong candle, if its a strong green candle, I will continue to hold the remaining position for Target 2 however, if it is a strong red candle then I will look to take profits.
2- Price bounces off the 20 period SMA, Again, with a strong red candle. in this case I will take profits. (it must be a Strong Selling candle, not a red candle alone)
3- Price breaks above the 20 period SMA but breaks through with a weak candle and then has no follow through (in other words, price breaks above the 20 period SMA but the following candle does not exceed the high of the candle that broke above the SMA). In this case, I will look to sell my remaining position right before the close of that candle.
4- Price breaks through the 20 period moving average with a strong green candle, in this case I will look for target 2 while adjusting my Sell limit orders based on the price level of the upper Bollinger Band. I hope this was clear, please feel free to comment with any questions! good luck trading!
1- Price goes sideways, in this case I will base my decision on the next strong candle, if its a strong green candle, I will continue to hold the remaining position for Target 2 however, if it is a strong red candle then I will look to take profits.
2- Price bounces off the 20 period SMA, Again, with a strong red candle. in this case I will take profits. (it must be a Strong Selling candle, not a red candle alone)
3- Price breaks above the 20 period SMA but breaks through with a weak candle and then has no follow through (in other words, price breaks above the 20 period SMA but the following candle does not exceed the high of the candle that broke above the SMA). In this case, I will look to sell my remaining position right before the close of that candle.
4- Price breaks through the 20 period moving average with a strong green candle, in this case I will look for target 2 while adjusting my Sell limit orders based on the price level of the upper Bollinger Band. I hope this was clear, please feel free to comment with any questions! good luck trading!
Trade active:
Hey Traders, Target 1 was succesful as shown above. (I made an error in the first update, Target 1 was met at 100.55, Not 100.60). Stops and Targets for this strategy are derived from ATR, Bollinger Bands, and 20 period SMA. Targets must move with the moving average and/or Bollinger Band because there values are always changing, For Example: When I initially took this trade, The 20 period SMA was around 100.80's however by the time price got up to that level, the moving average had come down to 100.60's. I typically take Target 1- within 20 points, pips, cent etc, below or above the moving average. Target 2 is taken 1 ATR below or above the Bollinger Band, in this case, it would have been 1 ATR below the upper Band. I think there is a little more upside on this trade so I have decided to Trail my stop for Target 2. I see 1-2 days of price weakness or moving sideways ahead before continuing higher. I have locked in Profits for Target 2 by Trailing my stop. The last update i did (above this one) shows 4 conditions that i was looking for to help me manage this trade. Condition 1 happened therefore I am looking for a little more upside even though Target 2 was technically reached. Now I am looking for a couple more conditions to help me manage the remaining position.
1. Price Breaks and closes below the 20 period SMA with a Strong selling Candle, IN this case I will move my trailing stop right up below the low of that candle (assuming that candle does not exceed my current stop)
2. We have another strong Buyers Candle, In this case I will be looking for price to touch or exceed the upper bollinger band. If price exceeds the upper bollinger band (on an intraday basis, it does not need to close above band), then i will look to sell the remaining position.
1. Price Breaks and closes below the 20 period SMA with a Strong selling Candle, IN this case I will move my trailing stop right up below the low of that candle (assuming that candle does not exceed my current stop)
2. We have another strong Buyers Candle, In this case I will be looking for price to touch or exceed the upper bollinger band. If price exceeds the upper bollinger band (on an intraday basis, it does not need to close above band), then i will look to sell the remaining position.
