moneymaking
Short

AUDJPY: BEARISH FLAG PATTERN FORMED, CLOSE TO BREAKOUT [4HR] !!!

FX:AUDJPY   Australian Dollar/Japanese Yen
520 14 15
Hello Traders,

Here we have a valid bearish flag pattern on FX:AUDJPY             and currently we are sitting close to the potential breakout to the downside. Flag patterns are also consolidation patterns, just like any other harmonic patterns ( cypher , bat, butterfly , crab , gartley ). This pattern is usually formed after a strong movement in price action. There are 3 main parts to this pattern: the flag pole, flag portion, and the continuation portion. After a strong movement, a strong selloff in this case, the market starts to consolidate and we expect the market to breakout in the direction of the flag pole, in our case to the downside.

After getting the breakout, the target is equal to the length of the flag pole, which is 252 pips for this setup. Also a key point to keep in mind is that, the longer the market stays within the consolidation zone (flag portion), the stronger the breakout to the downside will be. The invalidation point for this flag pattern is when we get a break AND close above the upper rising trend line of the flag portion. See the chart above for more details.

Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Thank you everyone for all the SUPPORT that you have given me so far, I truly appreciate it. Good luck everyone :)

Follow me on Twitter as well: moneymaking2016
Comment: UPDATE #1: Hello traders, we recently got the breakout of the bearish flag pattern BUT it is not a convincing type of breakout. Stay cautious, don't need to rush into entering short. We need to see a strong breakout to the downside followed by a valid re-test before going short. Also note that after breaking and closing below the flag pattern, the candle right after that was able to close back above the broken level, which could be an early signal of a potential false breakout :)

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Comment: UPDATE #2: Hello Traders, we have just gotten a convincing breakout in the flag pattern. All we need to do now is wait for a valid retest of the broken level before opening a short position :)

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Comment: UPDATE #3: No valid re-test of the broken level yet. Staying on the sidelines for now :)
Comment: UPDATE #4: Hello traders, till this point we have gotten to false breakouts in this flag pattern setup. I will still be looking another breakout to the downside With valid re-test of the broken level. For now staying on the sidelines :)

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Comment: UPDATE #5: Hello everyone, just got another convincing breakout. Now only need to wait for a VALID RE-TEST of the broken level before opening a short position :)

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Comment: UPDATE #6: Hello traders, after getting a strong breakout to the downside, I was waiting for a valid retest of the broken level by the market. Currently market has provided us with a 2618 trade setup right at the broken level. Selling at the completion of the 2618 trade setup, we will be risking 61 pips to make 252 pips. This is almost a 4:1 R:R trade, which I am willing to take any time it presents itself.

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Comment: UPDATE #7: Hello Traders, our short entry based on 2618 trade setup at the broken level has been triggered :)

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Comment: UPDATE #8: Hello everyone, just got stopped out for 62 pips, especially due to the 2 AUD high impact news events that came out today (Nov.11.2015) @ 7:30 pm. Note the bearish flag pattern has been invalidated by the market. I have another setup formed on this pair, so stay tune for that idea to be published :)
Trade closed: stop reached
Nice. I saw it too. Question: Given that we have a bearish flag, as is the case in question, do you normally sell the break, thereby subjecting yourself to a false break, or wait for a re-test, thereby running the risk that there is no re-test? Thanks for all your good work and good luck
+1 Reply
Hey mate, excellent question. I consider myself more of a conservative type of a trader. So I always wait for a valid retest of the broken level BEFORE jumping into a trade. There is good and bad sides to this approach. Good side being that you prevent any type of false breakout and also avoid getting yourself stuck on the wrong side of the market. The bad side being that after getting a strong breakout, you rarely get any retest of the broken level and you can't even enter into that trade anymore. A good example would be the NGAS bearish flag pattern that I posted about 8 days ago (see the related ideas section above: https://www.tradingview.com/chart/NGAS/dfBkvC5L-NGAS-BEARISH-FLAG-PATTERN-FORMED-WAITING-FOR-BREAKOUT-4HR/). There we got a strong breakout to the downside and I was waiting for a valid retest of the broken level but didn't got any. So I was not able to enter into that trade based on my trading rules, which is totally fine with me. So it all comes down to how you react towards these types of situations. Are you comfortable letting these types of trades go by OR do you take the aggressive approach and pull the trigger with a potential risk of getting trapped in the false breakout. It's really up to the type of trader you are. Hope I have answered your question and feel free to ask more questions. All the BEST mate :)
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Marvin moneymaking
Ok cool. I was hoping you'd give me the "holy grail" answer but as usual there isn't one! But it's kinda ressuring to know that I haven't been doing anything wrong too. Thx mate. Let's see how this one pans out.
+1 Reply
Hehe, yeah man. I also started for the holy grail type thing when I started, but not anymore :)
Reply
Solid post man! =)
+1 Reply
moneymaking Daniel.B
Hey mate, thank you appreciate the kind words :)
Reply
moneymaking moorekapital
Nice work mate, all the BEST :)
Reply
moorekapital moneymaking
Thank you, Moneymaking Machine ;)
+1 Reply
moneymaking moorekapital
Hehe, "machine" good one :)
Reply
moorekapital moorekapital
I actually short this at 86.810 based on the nature of the PRICE ACTION evidenced by the 3-bar formation around the MODE. See the link below for my entry on my PAMM, where I manage clients Funds. https://moorekapital-gmail.tinytake.com/sf/MzU3ODIxXzIwNTM0Mjk (Kindly click on "full screen" above the image to see things clearly )

https://moorekapital-gmail.tinytake.com/sf/MzU3ODIxXzIwNTM0Mjk
+1 Reply
moneymaking moorekapital
Hey mate, whao you got an amazing entry. Great work. Thank you for sharing the chart :)
Reply
snapshot

same view :)
+1 Reply
moneymaking farid_ardavani
Nice work mate, all the BEST :)
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