I am an enthusiast of trading. I have been studying trading for a few months now. Therefore, I am a total newbie. I believe that I spent enough time in the library and it is time to publish my ideas and get feedback on them.
This first idea is about a pattern that I found in the ANKR/USDT pair in the . Let me briefly tell you why this pattern looks promising to me.
1. Pattern completion is NOT premature.
Scott Carney, the guy who is now to be the founder of "harmonic trading", says in his book that time from B to D should be at least at 0.382 of the time from X to B. My experience so far agrees with Scott Carney's suggestions. Patterns I have found with D points before or right at 0.382 of the time from X to B are almost always failed patterns. With that said, you would want the pattern to be ideally symmetric. This pattern, on the other hand, is not symmetric, it is not mandatory.
2. The Potential Reversal Zone (PRZ) is tight.
The three values that determine the PRZ, which are 0.886 XA, extension, and BC projection, forms a tight PRZ that provides a less risky trading setup.
3. Once the prize enters the PRZ, we get an initial reaction, a "tail candle"
BUT! We didn't get a quick upside bounce?! It is right. Although, if you take a look at the BTC .D chart on 4-hour chart, there was another for BTC Dominance. We got out of that just a day or two ago. So, you can't expect altcoins to reverse sharply to the upside in an environment where the BTC is dominating the market. The good thing for ANKR is that it stopped its downward move just below the PRZ and the DEMAND at that level is stronger than the SELL pressure.
4. The is also showing a with the price action. This is also a positive sign of a potential reversal.
As Scott Carney says in his book, trading requires active management and I have a few things to say on that, as well. To me, there are two major to watch during this reversal. The first one is the green-dashed trendline with a positive slope. We should first break above it and should stay above it. As long as we stay above it, it means that the reversal move is ON.
The second is a resistance trendline of previous highs. This trendline is not very far from the 50 MA which increases the importance of that area in the chart. However, if we can break above the red trendline and it becomes support, then the price can go higher.
Considering the desire of DXY to move to the upside, I don't know if ANKR can go up till the 0.382 or/and 0.618 Fibonacci levels. To me, it is strongly tied to the move in DXY and the correlation is negative. However, there is still a chance of good profit in this setup. The most likely scenario to me is that ANKR touches the 50 MA which is around 0.010.
I hope you enjoyed it. I appreciate your constructive feedback and criticism.