I like the Bearish candle on the daily in this setup which could become an engulfing with a lower close. Doesn't mean it will go down for the first Red Dot, but I am also looking forward to see the next waves and pivot points on this project. I am looking for similarities between the market path and the yellow path, but also potential hits on the dots.
I only trade with the Japanese Candlesticks, and I consider a pivot point to be a green candle after a down wave, which could be the starting point of a bull wave. Or the other way around. I place the stop loss above the highs or below the lows, and move the trailing stop if a big enough candle appears that provides considerably higher high for a long position (stop loss below its low) or a long enough bearish candle with a lower low for short positions (stop loss above its high).
Even if this short setup is not successful, I will be looking and waiting for other potential pivot points on this project.
I only trade with the Japanese Candlesticks, and I consider a pivot point to be a green candle after a down wave, which could be the starting point of a bull wave. Or the other way around. I place the stop loss above the highs or below the lows, and move the trailing stop if a big enough candle appears that provides considerably higher high for a long position (stop loss below its low) or a long enough bearish candle with a lower low for short positions (stop loss above its high).
Even if this short setup is not successful, I will be looking and waiting for other potential pivot points on this project.
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First day in the trade was a long bearish candle, bigger than the entry signal one, and in the third day the position can be secured at break even or with the stop loss moved above yesterday's high.
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If the candle for today ends like it is looking now, it could be a moment to decide one of the 4 options:
1. Close the trade with a profit
2. Close the trade with a profit and reverse position with stop loss below today's low
3. Add a buy hedging position with the stop loss below the low, option which can end in several scenarios. (Both trades closed without a loss, small profit or break even depending on money management regardless of what stop losses will be hit)
4. Just secure the position at break even
The 4th option misses the opportunity in the scenario where the price shoots up next week, closing the short at break even where the long can also be secured at break even. Evidently there are many other scenarios which can play out and the road to reducing risk while potentially maximizing gains is a tricky balancing act. Will probably provide a clearer assessment before the close of the day, but the main idea is to attempt to avoid wishful thinking or fear of missing out and just make a rational decision regardless of how we justify it.
1. Close the trade with a profit
2. Close the trade with a profit and reverse position with stop loss below today's low
3. Add a buy hedging position with the stop loss below the low, option which can end in several scenarios. (Both trades closed without a loss, small profit or break even depending on money management regardless of what stop losses will be hit)
4. Just secure the position at break even
The 4th option misses the opportunity in the scenario where the price shoots up next week, closing the short at break even where the long can also be secured at break even. Evidently there are many other scenarios which can play out and the road to reducing risk while potentially maximizing gains is a tricky balancing act. Will probably provide a clearer assessment before the close of the day, but the main idea is to attempt to avoid wishful thinking or fear of missing out and just make a rational decision regardless of how we justify it.
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Appears to be a smaller bullish candle at the end of the day. The hedging option would have been intriguing considering it is the end of the week and gaps could happen on Monday, but I am going to stick with the position with stop loss at break even.
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Another bearish day and the price is almost at the half way between entry and the potential target the Red Dot. The candle for today is not long enough to move the trailing stop above it's high, but moving it above the high of the previous candle should be enough. The main idea of this approach is to stay on the wave for as much as possible if it is a long one.
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Position closed at the trailing stop with a small profit. Tomorrow is the time stamp of the red dot, and with a bullish engulfing for today there could be an opportunity to go long at the day close in case this is a good pivot point.
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Pivot point confirmed at the Red Dot Time Stamp. The low of the bear wave was 14 pips above its white marked price level.
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Rebound from the marked price level of 0.8627. Looking forward to see if this is heading towards the blue dot.
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Level retested and another bearish candle at this price, near the peak of the yellow path waves. Bulls got me with little profits in both shorts that I have tried on this one with the daily candles. This is the third attempt, even though the project is looking at higher prices with those dots. Maybe the blue dot zone provides a better entry for a long.
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A change in perspective in this project, leaving only the dots, this time with marked time stamps. The first red dot day was a pivot point and the beginning of a bull wave. On the yellow dot day the price finally broke the red level from which it bounced 3 trading days earlier. On the day of the blue dot the price dropped sharply but the price eventually found support at the red marked price level. 3 or 4 more dots in this snapshot. Hopefully they won't disappoint and make for a nice story telling.
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A hit on the Red Dot.
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We are at the time stamp of the red dot with a complete hit of it. What is the next move in this snapshot?
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A bit of a bounce at the red marked price level and a potential green candle after the bearish wave. Is the yellow path still valid? Will it visit other dots in this project?
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Yesterday's candle ended in the red but the Bulls have tried again today to push this away from the red marked price level. Will this support level hold? The closing price for the daily candle will probably be important.
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3 consecutive bullish candles but don't know if the momentum is strong enough to push for the previous high, at the white marked price level of the white dot.
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Good pivot point at the marked price level. Approaching the white one and the time stamp of the next dot.
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The yellow path has been surprisingly on point. It ends here at the time stamp of the red dot which hasn't been hit, but still made for a surprising overall bullish move. Only 2 dots left in this project. Don't know if any other entries or pivot points might occur in this project.
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Potential inverted hammer with the shadow right near the Dot which was almost hit. Potential pivot point.
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Kind of a hit on the white dot. Not sure about the prospect of the orange.
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There was a bearish engulfing at the white dot yesterday (Daily time frame) and this is how the whole project looks on the 4H time frame. The Orange dot could be a complete miss, but I really liked the candlestick pattern from yesterday on the Daily.
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We end the week with an interesting down move right along the arrow from the original idea posted one month ago. Not sure if we will get to see a hit on the Orange dot next week, but we have already seen 3 hits on the dots in this project, with the most crucial turnarounds right at the time stamp and above the first Dot.
