Guy's I was conservative all the way when it came to buying EURAUD
because it simply didn't look good enough. The short calls turned out to be absolute winners this week. So I hope you guy's profited from those analyses. Nevertheless we might see a nice 1-2-3 reversal pattern next. The move up from the low @1.4477 can be counted as a leading diagonal
. After a leading diagonal
we often see a strong retrace and that's what we might have seen for EURAUD
by means of 3 waves lower. If we see a 1-2-3 reversal confirmation we should place stop below the low for wave 2 because if we break lower this reversal pattern will simply be invalidated. This is how we trade, we rationalize stop loss based on structure. This is not trading advise, just a scenario that I will use in my advantage. If this is indeed the bottom for a wave 2 the risk reward will be incredible since we are at the bottom of a possible daily triangle. But first things first and let's see whether we get the reversal in the beginning of next week, then we will focus on how to manage this trade.