FX:EURUSD Euro Fx/U.S. Dollar
The following idea is based on a reversal at the large on a potential P5 count. I also have converging reaction lines meeting price at the potential P5 extreme. The target is the lower parallel. let's see how this unfolds with a conservative 19 pip stop and good Risk/Reward. The pullback is all that's needed.
I always start with a BIG PICTURE Pitchfork, so when I saw the Euro smash into the BIG Median Line with some beautiful Reversal legs, I was looking for additional confirmation for a short. My next step was is to always 'Count Pivots' as I see the markets in 5 pivots and am always on the lookout for a P5 reversal:) and thus a potential BIG move. Not to say I won't get a Pivot 6 & 7 and stop me out but even in these cases I will look to trade P7 reversal also as it will usually be an extreme move. It also tells me which leg I am trading. Even before P5 confirmed I put in a smaller pitchfork to alert me for a potential "Price Failure" ie. failure to reach the "Small" median line. Before I go to the final step let me recap what we have. 1. A direct hit of the "Major" median line with good reversal legs or pin bar, doji rejection. 2. A clear pivot count @ P5 preferrably, 3. A potential failure at the 'Small' median line ( Read the rule on price failure it gives you the probable duration of the reversal move ) and finally, unless you have the "Holy Grail" I personally don't buy/sell the line, unless your good at catching knives on the pointy end:) so my entry trigger is a pullback at around 15-20pips from the extreme, If no pullback, no trade....This gives me my good Risk/Reward 2:1 minimum preferably much higher. I hope that my explanation was not too long winded. There is alot more to this trade in terms of probable duration of move but maybe for another day:) appreciate your coments, take care