JasperForex

EURUSD: Trading a la Carte

FX:EURUSD   Euro Fx/U.S. Dollar
The Euro             obviously is a weak currency though it rallied a couple of times the last month for no real fundamental reason. It seems it seized the opportunity to capitalise on the recent uncertainty surrounding the USD after the last FOMC statement left the market confused on its direction and after the poor NFP numbers that came out last week. Traders have been selling the dollar the last few weeks, quick to discount the chance of an early rate hike. The FOMC minutes of last Wednesday however showed that some FED members are still very much in favour of a June hike, which immediately re-strengthened the dollar. So, with much of the uncertainty surrounding the dollar now gone, we can clearly say the fundamental direction for this pair is bearish .

On the technical side, there is a lot going on with the 4H timeframe and there are several trading opportunities to be found. I have charted them and will describe them here, but to avoid cluttering up the chart I have refrained from plotting trade entries, exits and stop losses. It would have made the chart messy.

We have a bullish Bat pattern where the price is approaching the potential reversal zone (PRZ). Trading the CD leg of a bat pattern towards its completion is called the BAMM strategy and is a legitimate trade setup in itself. Those who are already short on this pair, could remain short until PA has tested the full PRZ and starts showing signs of reversal. This means that from the current price there is between 70 – 115 pips more downside before a significant retracement. I do not advise anyone who is not already short to enter short now (the break of the B point would have been a good entry), but if your plan and method tell you that you can, by all means go ahead.

The A and C point of the Bat pattern happen to form another price pattern called a double top. A double top is a double top if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA rallied and tried to make a higher high after the bad NFP data, but failed. This reversal pattern might not have played itself out completely yet, even though after failing to print a higher high, the price already dropped significantly and broke the neckline. We are looking for a retracement to happen soon (which is likely given the oversold state of the RSI), which might coincide with the reversal of the Bat pattern . This retracement could end either at the neckline (which might act as resistance) and where there is a nice confluence with the 382 retracement of AD or –in case its strong, which is less likely- at the 618 retracement of AD. Trading this retracement is only for harmonic / countertrend traders who know what they are doing, since the overall trend is bearish .

After the retracement I would have an ideal place to go short on this pair to profit from the bearish trend (either at the neckline or 618 retracement of AD, depending on where price might reverse again). I would then remain short until the 1272 extension of the prior leg down, maybe even until 1.0273 (key daily support level) depending on PA.

To be clear, I am not predicting any of this will happen, but if it does, I hope to have provided several valid trade ideas (both with and countertrend) and areas where to enter those trades and where to exit. These are on my watch list. Call it trading à la carte. My advise to anyone looking to take one of these trades would be to consult your own trading plan and apply the rules of entry, exit and risk management you normally use and are comfortable with. Good luck and may the pips be with you!

NB For some reason the support line at 1.0273 is not showing in the chart (I did chart it!), apologies for that.
You don´t need to be a weatherman to know which way the wind blows - B. Dylan
DanV MOD
2 years ago
Thanks for sharing detailed yet clear analysis with equally detailed commentary . This is what gives value added educational content for Tradingview Community.

Based on my interpretation price action & EW I am expecting retracement bounce in EURUSD though not sure of the extent as per the chart below. It remains to be seen.

Excellent work. Appreciate it.
snapshot
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JasperForex PRO DanV
2 years ago
Thanks for the kind words, I appreciate it. I may not be right, but I do try to explain my train of thought on this pair. And thanks for sharing your chart on this. There are certainly things we agree on in both our analyses. We agree that:
(1) we are likely to see a –significant- retracement before PA hits the low of the March the 13th
(2) after that retracement, PA will go bearish again
(3) it is likely to break below the low of March the 13th.
Lets see how this all plays out!
+1 Reply
DanV MOD JasperForex
2 years ago
Yes indeed will follow with interest how price develops.

BTW - There was no criticism of your work. We have different approach and with similar outcome anticipated is remarkable. Even if we are both prove wrong or only half right it is an attempt to frame what is viewed as random and chaotic with some degree of accuracy frequently enough suggest that effort made using TA has merits.

It is not necessarily everyone's style but you are clearly setting high bar. Nothing will detract from that, I mean it sincerely.
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JasperForex PRO DanV
2 years ago
Lol I did not perceive it as criticism, far from it. I like the "I may not be right..." disclaimer (I use it more often) because I see trading as a probability game, where a system can be profitable, but there is always a random distribution between the wins and losses so individual trades can never be predicted with full certainty. I am actually more confident in the potential set ups, knowing your EW based analysis aligns with my harmonics - structure-fundamentals based analysis on the 3 points I listed above. Thanks for sharing!
+1 Reply
DanV MOD JasperForex
2 years ago
YW, and only real advantage or edge we could have in that seemingly random price behaviours is our Money management that involves both the position sizing and sensible stop placements together with taking profits and not overstaying your well come.

Yes indeed 2 different approaches come together do give extra weighting to considering the trade. :)
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JasperForex PRO DanV
2 years ago
Not overstaying your welcome, I like how you say that. Indeed, taking profits when the market makes them available is key to not letting winning trades turn into losing trades.
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finnan505
2 years ago
One of my favorite charts of all time, cause it is decipherable to those trade other than TA
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JasperForex PRO finnan505
2 years ago
Thank you for saying so. Lets see if the market agrees with it next week.
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jutkarsh PRO
2 years ago
very nice chart, thank you. can u suggest any link or any of your previous post to know more about BAMM strategy?
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JasperForex PRO jutkarsh
2 years ago
BAMM, an abbreviation for Bat Action Magnet Move, is described in full in chapter 5 of Scott Carney´s excellent book Harmonic Trading V2.
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jutkarsh PRO JasperForex
2 years ago
thank you, shall order both volume now
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JasperForex PRO jutkarsh
2 years ago
You are welcome, good luck!
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jutkarsh PRO JasperForex
2 years ago
thank you :)
also is BAMM only for entering CD leg on Bat patterns or we can use this to enter on any harmonic patterns?
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JasperForex PRO jutkarsh
2 years ago
I use it only for Bat patterns, but some experienced harmonic traders use BAMM (or some variation of it) on other advanced price patterns as well. Try it, backtest it and if it works => implement it in your trading plan.
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jutkarsh PRO JasperForex
2 years ago
ok, thank you again
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jutkarsh PRO jutkarsh
2 years ago
hello sir, is this viable butterfly pattern in green and Gartley pattern in peach? if yes then we have confluence. many thanks for your response
snapshot
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JasperForex PRO jutkarsh
2 years ago
The Gartley pattern aligns with my rules on the Fibonacci ratios, so yes, I would say its valid. The Butterfly pattern does not, the B point has to be at least a 786 retracement of the XA leg for it to be valid.
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jutkarsh PRO JasperForex
2 years ago
ok, thank you sir
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GcNaif MOD
2 years ago
good one , i have a similar chart which was publish last week ,
Current chart:
snapshot

Published Chart 4 days back:
catching the CD leg pips of this potential bullish bat
- on this i got the pips on the CD leg
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JasperForex PRO GcNaif
2 years ago
Nice one! Did you enter the trade for the completion of the CD leg at the C point? That would be even more aggressive than a BAMM trade. You are making good pips on this one, my compliments.
+1 Reply
GcNaif MOD JasperForex
2 years ago
yeah i got in at 1.082 then closed mytrade on friday 1.058
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JasperForex PRO GcNaif
2 years ago
I see, somewhere between C and B that is. Nice trade: 200+ pips.
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leharman PRO
2 years ago
Fantastic analysis!! :-)
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JasperForex PRO leharman
2 years ago
Thank you for the kind words. I hope it helps.
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IIIII
2 years ago
Ugh.. This is so accurate!! I need to study Harmonics -_-
:D Jasper, what literature do you recommend?
+1 Reply
JasperForex PRO IIIII
2 years ago
To begin with, I recommend the following books on harmonics / advanced price patterns:
-Trade What You See by Larry Pesavento & Leslie Jouflas
-Harmonic Trading V1 & V2 by Scott Carney
Reply
jutkarsh PRO JasperForex
2 years ago
Hello sir, is there any video series you recommend or do u have your own? Thank you.
I'm reading trade what you see and ordered Scott carney.
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JasperForex PRO jutkarsh
2 years ago
I learned it form those books and from practising. Good videos on this subject can be found on YouTube by Akil Stokes (also a member of Tradingview!), though his rules for the patterns differ slightly from Scott Carney, but you will gain many practical insights on day to day pattern trading if you watch him.
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jutkarsh PRO JasperForex
2 years ago
Ok sir, I'm already following him and seen manu of his and Jason's YouTube videos. Thank you :)
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olesiaTreider jutkarsh
2 years ago
russian rtsi
rts

http://clip2net.com/s/3g2u4eI ?
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jutkarsh PRO olesiaTreider
2 years ago
It must have AB=C for any valid advanced pattern. Jasper sir can throw some more light on it.
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jutkarsh PRO jutkarsh
2 years ago
*AB=CD
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JasperForex PRO olesiaTreider
2 years ago
Sorry, I do not see a valid pattern there.
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UPDATE: So far, this pair has been following the script nicely. Since the moment of publication, we did have 80 pips more downside, completing the Bat pattern and testing part of the PRZ. Price then popped up a bit and dropped again to retest the D-point before starting the anticipated retracement / reversal of the Bat pattern eventually rallying 188 pips, ending at a test of the neckline and almost a 382 retracement of AD (as stated there is some confluence between those levels). Price reversed and dropped again, its now 120 pips lower and I am anticipating more downside. Watch the ECB press conference this afternoon for clues (hawkish or dovish tone).
snapshot
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TheShakeOut JasperForex
2 years ago
Nice analysis. There was strong demand entering the market on point D on your chart and the choppy bounces since then with no serious signs of weakness might be a sign of absorption of the floating supply at those levels. If the market makes a new high above 1.0740, it is going to challenge the 1.10 resistance. The continuation of the downtrend might take longer than we expected.
Take a look at my analysis of supply and demand on the daily chart:
Increase of Buying Pressure in the Euro
+1 Reply
JasperForex PRO TheShakeOut
2 years ago
Very nice, detailed, bar-by-bar analysis. Lets see how this one plays out, thank you for responding.
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UPDATE: After some sleight of hand by this pair, seeming to reverse after testing the neckline, price rallied and touched the 618-retracement level, providing a textbook 2618 play (= a conservative double top reversal trade). After this it dropped 120 pips and it now pushing against the neckline support.
snapshot
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UPDATE: Price broke below and closed below the neckline!
snapshot
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