FX:AUDJPY Australian Dollar/Japanese Yen
Looks there is a possible 2618 trade setting up on the 15 min. Looking to go short at the .618 retracement of the double top. I have my stop just above the structure level. My first target will be .618 retracement of my entry. Then my final target at the beginning of the retracement. I'm going to keep a close eye on price action as price goes towards the entry to verify this trade. Let me know what you think. Thanks
If are you referring to the 2618 by Stapleton you are a little off with the way you have it depicted for stops and take profit points. I think it's a great set-up as the 618 is perfectly aligned with previous structure spot on. Your R:R at take profit 1 is only 1:1 so that doesn't make sense from a money management standpoint unless your trades are right more than 50% of the time. I'm not that good yet so I need a R:R that makes more sense. You can pick my chart apart as well but I think the stop loss and take profit point 1 is how Jason would draw it and I took the 382 of the last major swing for TP2 which happens to coincide with the 1.618 Inversion of the 618 swing. All these number would of course change once the actual reverse point took place. Thanks for showing a great pattern setup, I'll set my alarms for the 618 and see how it looks.
Wolverine thanks for your feedback. You're absolutely right. My R:R is not setup the way he does it. From my understanding he would have the stop above the double top. I used a much lower stop because there really isn't much structure beyond the entry until price until the double top area. So if price gets near the .618 I'm going to be monitoring price action closely to see if this is a good opportunity. If I enter this trade and if price hits my first target I would keep a close eye on the 92.32 that's where the next closest area for structure is. So if price is able to break threw it would trail my stop accordingly. I picked my second target solely on that structure line. You're targets look spot on per his instructions. Sorry I didn't add this originally I just wanted it to be known there is a possible setup. Thanks again for your comment. Good luck if you take this trade.
I will definitely take this trade if it goes for the 618. The first take profit is obvious. The second not so much. I looked at the daily and there is a hint of a channel taking place and if that is the case going after the 382 seemed like a safe bet. I have found that when I get greedy I have regrets. Some of these 2618 trades just don't justify the risk for me depending on the setup and the amount I need to risk. My instructor traded futures on currency which made it too expensive and playing standard FOREX will allow you to peel off and let that last one ride to that lower channel once in a while.
These setups usually have a big 1:1 ratio which is why I have my stop just above the structure around the .618. Looking at the higher time frames to get the big picture is always a good idea. Overall this pair looks pretty bearish. If I get filled and hit my first target I'm moving my stop just past breakeven to lock in profits. Then I'm going to trail my stop. I just wanted to show a couple of potential targets.