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 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 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 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!
Trade closed: target reached:
Hey everyone, Target 1 has been met on the Bullish Cypher Pattern! I closed half of my positions with a nice profit and now I will be rolling stops to near break even for Target 2. I will be actively managing this position and will be sure to keep this idea updated to let everyone know when the remaining portion of my position is closed. Targets have not yet been reached on the Bollinger Band strategy trade that I published shortly after publishing this one so be sure to check the status of that trade as well (that idea is link in the related ideas section below and has the same title as this idea). the chart above this update is a brief look at the Bollinger Band trade however to see it live please be sure to head over to that idea. Thanks everyone and good luck trading!!
