Good day,
Let’s take a closer look at my last published idea to see how price has been behaving. In my last post waves within waves (link below) we see the end of EW3 and the potential target for the completion of EW4 (which is now complete) price attempted to complete EW5, which in order to do so price would need to touch the 127.2 Fib Ex of EW3.
After the completion of EW4 price did initially attempt to move towards the EW5 target and as price was trying to establish the 5th wave we notice an Ascending triangle(red) which is a chart patterns with flat tops (resistance =blue) and up-sloping price trends (support =orange). Once price breaks the support of the ascending triangle we have a clear understanding that perhaps the target of EW5 is not attainable. Furthermore the formation of the potential head-and-shoulders pattern capturers our attention and we now keep an eye on it to see if the H&S Pattern will complete.
Formation of the pattern:
Left shoulder: Price rise and we have a price peak, followed by a decline.
Head: Price rise again forming a higher peak, followed by a decline
Right shoulder: a rise in Price forming the right peak which is lower than the head.
The neckline is drawn from the start of the left shoulder to the end of the right shoulder, formations are rarely perfect and it takes a little practice but should not take too long to master. Once price breaks below the neckline we wait for the retracement back up to the neckline and then it time to enter your trade.
Note: Plan the trade beforehand, writing down the entry, stops and profit targets
Happy Trading
Delta_X-ray
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