KVE
Long

EUR/USD: 4H bullish bat to resume uptrend or complete H&S?

FX:EURUSD   Euro Fx/U.S. Dollar
464 15 11
6 months ago
Getting to TP1 of the daily bearish bat... I took partial profit on that position (part of TP1, TP2 still in place) with all remaining stops now at 1.1455.

Possible new bat completion in the area of the daily bat TP1, so some retracement may occur there... RSI getting oversold, no divergence however (lower low atm on RSI and MACD ...).

As long as we don't break below the new bat's X point the short-term uptrend is still in place so maybe this bat might get us back to that uptrend... Also: possible H&S pattern could be forming... In such a case we could be looking at a more considerable up move so setting the targets better than usual for this bat (0.382 and 0.618 retracements) is possible (also the 0.382 ret. for this bat has poor R/R so not really ideal to use the usual targets, at least not with the SL as used here....).

Anyone should decide for themselves, depending on their individual rules, if this is worth trading and how to set SL and TP levels for this particular situation. If your bat trading or money management rules tell you otherwise: adjust accordingly or don't trade it at all, stick to your rules!
If traded I would however strongly recommend trailing SL closer to or entirely at BE when price hits either that 0.382 fib and/or the trendline, just in case we get a different scenario... Or just wait for confirmation...

Alternative scenario: Based on the fact that we don't have strong confirmation from the momentum indicators we could be getting only a limited retracement after which we could continue down to the trendline or the daily bat TP2 below...
Possible long opportunity on the bounce or short opportunity on the break of the trendline. Daily bat TP2 just a little lower so watch out if you trade the breakout: look for confirmation!
6 months ago
Comment: Posible short to bat completion?
snapshot
6 months ago
Trade active: Entered long 1.1260, we'll see...
6 months ago
Trade closed: stop reached: Entered a new long just now based on 1H MACD divergence, small position, SL below the low, trail to BE at 1.1250.

4H lower low on MACD, so still bearish there, daily close to 100MA and tested lower BB today, next possible support at 1.1148.
sinakhan98
6 months ago
You mean Gartley, right?
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sinakhan98 sinakhan98
6 months ago
Honestly I dont know these harmonic patterns so well but I remember that 61.8% is the Gartley pattern and Bat is 50%. But I could be wrong, that was just a question of mine :-)
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KVE PRO sinakhan98
6 months ago
Hi, You're right 50% B for bat and 61.8% B for Gartley.
In the original description of Gartley patterns by H.M. Gartley (before bats were even defined) there were no real fib ratio's assigned, they were added by others afterwards, and there were different views on them...
In 'Harmonic trading vol.1...' by Scott M Carney the author writes that the Gartley pattern requires a precise (more precise than other harmonic patterns) 61.8% retracement for B and for bat the B point must be less than 0.618... (preferably 38.2% or best is 50%). Based on this the pattern which I drew here is a technically a bat
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KVE PRO KVE
6 months ago
But of course this can be debated upon..., 0.574 is sort of in between...
I also combined possible nearby support and the larger bat TP1 confluence to give me more confidence in calling it a bat.

If it reverses where it is now (if we get at least 0.382% retracement from the last low and certainly when we get to the 0.618%) then it would have reversed at the 0.786% of XA, making it a Gartley... In that case I would cancel my orders. For now there still on...
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sinakhan98 KVE
6 months ago
Ok now I see the difference. My B is at 1358 and yours at 1385 which means we have different C points as well and which makes the one Im looking at to a perfect Gartly. But thanks anyway :-)
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KVE PRO sinakhan98
6 months ago
Well, I looked at both options before I published and chose the bat instead because the one you are talking about falls short in its C point...: 0.341 instead of the min. 0.382...

We'll have to see what happens, a move up to 1.1357 (Gartley TP1) before we reach my bat's PRZ (between 1.1259 and 1.1237) wil confirm that it's most likely a Gartley and invalidate my bat. A close below 1.1237 technically also invalidates the bat (max. BC projection of 2.618).

If we move down to 1.1259 before we reach 1.1357 then the bat is still valid and I will look at smaller TF's for confirmation and trade it!
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sinakhan98 KVE
6 months ago
Well that depends on where you start your fibonacci. If you start to measure at the green bullish candle high (the wick) at 1.1615 then you are right. I start at the next bearish candle high. Thats just a matter of definition :-)
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KVE PRO sinakhan98
6 months ago
Yeah, lol, and a bit of 'pattern fitting' ;) Anyway even taking the next candle open gives 0.377 and if you don't use the wick on A then you shouldn't use the wick on B and C either if you're consistent, so then you will get 0.281 or something like that...

I always include the highs and lows since on another timeframe the open and close levels of next candles are also different so you will get a slightly different pattern on each TF..., I try to keep it so that my patterns give the same entry on all the TF's as much as possible...

But hey if you've devised a system unique to yourself and it works then that's all that matters, in that case you shouldn't even worry if other people draw it differently since it's your own system!
Cheers and good luck!
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sinakhan98 KVE
6 months ago
Thanks for replying but I think you are wrong because its not about pattern fitting. Candlesticks pattern and Harmonic patterns are not Rule-Based, all these patterns are rather Observation-based which means you need always take some deviations into your measurement and calculations. Its nothing writen in stones :-)
By the way so its exactly 38% on my chart ;-)
Anyway, seems that none of these two options has strong probability at the moment and price is building a Bearish Flag. Furthermore, if we are right about that Harmonic what-ever-name pattern then I dont mind to be wrong in some pips before taking profit :-D ..... Good Luck to you! and thanks again for replying.
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sinakhan98 sinakhan98
6 months ago
Ok I checked yours again :-)
I think we are talking about two completely different patterns.
If you are interested in chatting forex then you are welcome to candlesticktrade.com. Its free to register and use the live chat :-)
There are always some ppl online even if Im nt there myself so...
My name is David btw.
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KVE PRO sinakhan98
6 months ago
Hi David, just show me your pattern in a chart, then at least I know what you're talking about...

I used FXCM data btw, maybe IDC shows something else, the wicks on IDC are always much longer, I think that's probably due to less consistent spreads on IDC...

Nothing's carved in stone I know that, read the intro and look at my long entry and you will see that I agree with that and put it in practice...

If you want to trade these patterns however then you should use at least some set rules, whether it's the original rules from the book 'Harmonic Trading vol.1 (and vol. 2) - Profiting from the Natural Order of the Financial Markets' by Scott M. Carney (2010) or any other set of rules you have come to trust doesn't matter one bit, as long if it works for you it's good. But if you want to be consistent in your results and actually say something meaningful about your results based on these patterns, then you should have at least some rules to either validate or invalidate the patterns you trade... If not, then why even talk about them at all...

Look at what Alexander Nikitin is doing, he has his own set of altered rules which work great for him but he's consistent in how he trades and measures his patterns (he actually trades them with almost exact ratio's now!), that's the only way to go about this if you want to be consistent in trading patterns, otherwise why bother trading or even taking about them...

Looking at your comments I'm guessing you change the way you draw these patterns and even fib retracements to make them fit to whatever you are seeing in the charts, and again, if it works for you, do that, that's absolutely fine!!
But then please don't go about telling other people that they are somehow wrong, cuz according to my rules, which happen to be based on the original theory (why else talk about bats, butterflies or whatever??) I only see a possible bat and there's no valid Gartley based on the current PA with these broker data...

And the only reason I published about it is because I had confluence from the daily bat TP1 (38.2% retracement of last big move up), possible H&S neckline (very early, but who knows...) and possible support from a former swing low (bat X), which if we move below it, might signal a prolonged move down is to come (toward my daily bat TP2...).

Anyway: you're right, flag looks ready to break to the downside tomorrow, I will watch PA in the bat PRZ (another rule...) to either enter long or not, that is if I'm around at that time...
The long is still not convincing from the POV of momentum and the higher degree trendline test scenario (look at 'alternative scenario' in my original intro), but some support structure is there so we'll see... ;-)


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sinakhan98 KVE
6 months ago
I think you get me wrong here actually. I said you were wrong about pattern fitting. All those books you are refering to are mentioning the exact same thing that waiting for the perfect fib levels to get your harmonic pattern. But you know what, just forget about it :-)
You are right! Coz otherwise this discussion will go on and on and on ;-)
I agree... you are right! And you still very welcome to our live chat and we can chat and trade.
Cheers!
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KVE PRO sinakhan98
6 months ago
I guess I got kinda harsch on my last reply, guess I go tired of debating also... lol...

Anyway, thanks for being such a sport, cheers to you too!
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arif_awan
6 months ago
Don't think it will break above the trendline coz there is divergence on moving averages in daily chart...won't let the price go up...just my opinion!!!
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KVE PRO arif_awan
6 months ago
Yes, it's not convincing, the alternative scenario as described in the intro is possible..., we'll see.
Thanks for commenting!
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