Head and Shoulders forming on DAX

DAX seems to be forming a Head and Shoulders pattern, clearly visible in the H1 timeframe.

There is still strong support EMA (4H, 34) in the way and the formation is not finished or confirmed yet, so at this point, we are only OBSERVING if the formation will be finished. If not, we do not enter the trade.

Entry1: At the close of the first H1/H4 candle below the neckline
Entry2: On pullback to the neckline (if occurs and conviction is strong)

Exit: As always we use multiple Take Profits. The furthest one we are aiming toward the 14326 price level - which is the nearest support.

Stop Loss: We will put Stop Loss above the nearest leg up on smaller timeframes (30m, 1h), which should be around 14500.

This should give us a Risk to Reward ratio of around 3. By using multiple Take Profits along the way (aiming at the 14400 and 14360 price levels) we will bring the Risk to Reward ratio down to about 2

Comment:

The neckline is being tested, paying attention now.

Expecting small bounce, but watching for visible strength in breaking through.

Trade active:

cleo.finance bot automatic entry: 14435

Expecting volatility in 30 mins when US market opens, if neckline retest, will add to the position.

Trade active:

TP1 hit at 14 405, 30% of position closed.
Profit: 30 points (while risking 65 points). 70% of position still open.

Trade active:

TP2 hit at 14 355.6, 40% of position closed.
Profit: 80 points (while risking 65 points). 30% of position still open.

Trade closed: target reached:

TP3 hit at 14 327, remaining 30% of position closed.
Profit: 108 points (while risking 65 points). Position is now fully closed.

Total results:
Profit: 9 + 32 + 32,4 = 73,4
Planned MAE: 65 points (SL)
Real MAE: 25 points
Planned RRR: close to 1:1 (73,4 : 65)
Real RRR: 3:1 (73,4 : 25)

See you next time!