EURNZD: Price Action at a Key Decision Point

FX:EURNZD   Euro Fx/New Zealand Dollar
I've been sitting in a short position on this trade since this morning and it hasn't really done much. What initially caught my attention was the fact that I was late to a deep bearish Gartley Pattern. When I looked a little closer I found that price action had moved up a previous level of structure and had refused to create a higher close.

I would like this setup a lot more if the RSI had gone oversold, but as a pattern trader my plan says to take the trade and with me only risking 45pips to potential gain 74 it was a no brainer.

Structure traders may want to check out price action on the hourly as we are consolidating at those highs with divergence on the RSI

HOWEVER, with New Zealand's ANZ business Conference at 9pm NY time, it may be worth             proceeding with some caution.
your chart is useful as usual Akil, realy appreciate it. If I can give my opinion on that, I think that PA is going to break north; looking at the current consolidation near that resistance gives me the impression that next move will be up. Let's see what happens, market is always right! :)
+1 Reply
Akil_Stokes PRO LorenzoDecaria
I agree Lorenzo, it wouldn't shock me at all if we pushed up to 5760's. As a pattern trader I have to take it, but i'm glad it's one where I don't have to risk much at all.
Excellent comments Akil. I'm not so sure I would have used the start of the impluse leg at the 6/30/14 0900 leg. The retracement from the 6/25/14 0100 candle is more than .618. Now this is purely a personal rule of my own, especially when the the pair didn't retrace at least .382 from the 6/4/14 candle and that part of the leg was not considered as part of the impulse leg. I do believe that the pair does have a good chance of reversal from the previous highs as you point out. Resistance plus a .382 from the longer leg. And you are right...Beware of the announcement. BTW, I follow and give weight to your many chart analysis. With respect, Russell
+1 Reply
Akil_Stokes PRO russelldaily
Thanks, as you know I don't trade off news, but seeing how the Kiwi reacted a few days ago makes me assume that the public are ready to sell no matter what happens. On a personal note I'm not too in favor of using this leg either which is the reason I was a little late to the trade. It was never on my radar until our constellation software picked it up this morning. By that time price action was right at the highs which made it a no brainer risk wise for me to take. Could be a butterfly though (if you take the 6/30 X) depending on how you trade the pattern. I ignore the 1272 and look for the A-B 1618/A-X1618 which puts the completion at 5760's. I have a sneaky feeling we'll see that hit. Hey but like I always say, trade the plan so we'll see, hopefully I'm wrong.
Hi Akil,
Yes, any caution would be good for you :)
I would never consider to trade this sharp ending pattern. For me if it even do some retracement I don't care cause in my study (I studied patterns from Larry, Robert, Scott and Jim for about 5 or more years) this sharp edge on the ending of the pattern is a real killer for trading plan.
Of course I would be happy if you have this trade in plus, but for me, and I studied your work, you take too much risk ignoring this sharp edges. I have lost many trades and money doing that and when I spoke about this with Jim, he told me that in hes experience is not worth betting a trade against this kind of zones.

Anyways I would be happy if you win this, good luck !
+2 Reply
Thanks HarTm564. I'll tell you what, there are some traders out there that will criticize others in a way that's very rude. So I want to start by saying I appreciate the professionalism in your comment. The question that I have for you is how are you defining a "sharp ending pattern"This is the first I've heard of this terminology. I'm always open to learning and testing new filters out so if you can provide a brief explanation I'll be sure to keep an eye out for it and keep notes on it during my future trading. Feel free to leave a comment here or shoot me an email if that's easier. Akil@TradeEmpowered.com
HarTm564 Akil_Stokes
I'm really impress about your reaction, and yes I will correspond with you, after I'll get some sleep. Thanks for inviting me to this game of learning.
+2 Reply
pavan15589 HarTm564
Please do post a brief note here about the same....Will be really grateful....
HarTm564 pavan15589
I want to post it, but any charts almost always I do in the Metatrader4. Do you know how to post external screenshot from my hard drive or from the link, cause I can upload it as well?

I don't want to just steal anybody to some external blogs or sites. So I want to have possibility to just make chart in Mt4 and upload the image from it.
pavan15589 HarTm564
After all the hard work thats been put into this site (look at the site, its more addicting than facebook), I am so surprised how they would miss out something so simple as giving the option to post an external image.
You could just put a little theory here that gives a small idea about the sharp edged patterns.
HarTm564 pavan15589
The little idea is also inside my comment and what market have done already. You don't have to listen to me, cause market always do things and it holds the knowledge already. The ideal way is to trade, loose, then ask market great questions about it and answer comes if you give time and passion to study it. What I want to convey is ultimately to not believe books, and to study them only for the reason to question them and the real answers are in the market, nobody can have better expression of the patterns, trends, etc. than market, all is said after that, is distortion. Purest form of joy brings me always to be with the charts without anything else, without indicators and to study it. This is the reason behind my comment, to bring something real from my work and let the market do the rest. Not to just blindly follow the books and patterns, but question books and patterns.
+1 Reply
Schoem Akil_Stokes
Hi Akil and HarTm564. Please do share your comments on this "sharp edge" pattern formation. I'm assuming a sharp edge means a pattern that has completed with a sudden/abrupt movement in price action, possibly as a result of a news spike?
HarTm564 Schoem
Yes, something like that. I like to trade pattern in the context of the trend. Carolyn Boroden talks a lot of the trend in the simpler terms, and she uses harmonics a lot, but in a simpler terms as well.
I could make charts and pretend that I know a lot because I studied a lot and traded a lot, but first I don't want to steal this thread and I don't want to take much credit, cause there are better traders than me who developed coherent harmonic strategy.

I want to give them credit and respect, cause they worked hard for it and almost nobody today talks about the sources, which gives you a lot of new way of thinking from the author and not just simply patterns without the method behind the discovery of the pattern.

This are my only opinions and everything I say can be different in your own trading. Simply don't take my opinion as truth, just read the books of the authors.

I want to thank:

1.Robert Miner -cause he gave me powerful understanding of the basics of Fibonacci lines and how to make simple clusters. Also he learned me how to not be paralyzed by Elliott waves and learned me how to proper use it in the context of the Harmonics. He is the only one for whom I can give credit for understanding usage of the Elliott wave in the practical, not theoretical sense.

2.Carolyn Boroden -she is the only one who learned me to trade corrections of the trend and to stay in the trend and think simple about trend and trading. Also she learned me the importance of the trigger of the setup.

3.Larry Pesavento -he is the only one who gave me hard time of understanding multiple ratios of the patterns and this was very good cause it forced me to study for my own the charts.

4.Scott Carney -he is the only one who gave me the more confusion with hes new patterns after Pesavento. I was simply forced again to lastly study and develop my own understanding of the patterns.

5.Kane Jim -finally he gave me complete coherent view of the trading plan with the multiple Fibonacci ratios and derivatives. I've learned from him the most important thing, when is the time to trade and when not to trade (this is maybe not in hes books).

And others for a lot of solid work and for the solid confusion -without it I would probably be in the church of some Elliott or Harmonic guru today.

There you have it! That said you don't have to listen to me cause you can simply go to the authors above and find out for yourself.

Finally after saying all of this let's make some charts :)
+1 Reply
HarTm564 Schoem
I wanted to publish, but I cant. I wanted to publish a lot of good stuff on this forum but I'm stuck. I want from developers to just have possibility to post screenshot from my hard drive but I could not find how to do it (I went on wiki of the tradingview). If you want my publishing to start then join me in creating the question asking for this functionality in tradingview. Ask developers to have it on tradingview also I posted a question and idea for having more Fibonacci lines which I use in my daily trading building cluster zones, but there is no demand for it. If you want me posting some good stuff, then join me asking developers about putting external screenshot on tradingview. I want to post screenshot from my hard drive and paste it instead of the default chart. The decision is simple, if I would not be able to do it then I will not post anything. I will also not put any links for external blog cause I don't want to steal any of people from tradingview. I just want to post my ideas benefiting the tradingview community.
Akil, Do you trade every Gartley you see or only trade Gartley's in a channel? I read a lot about the Gartley only being traded in a channel.
+1 Reply
Akil_Stokes PRO TradersClassroom
I'll trade every gartley I see, assuming the risk reward lines up
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