Last week price broke above 2 months high, but a bulltrap was completed when price fellw below 2 the months high again. On h4 , a macd divergence was registered. suggesting that this structure might be topping out. The ideal entry will be when a right shoulder is pumped to the 2 mth high level. However , price is not obliged to do so, and shortist need to consider if price will continue down from here. SL above the head.
On reaching the 2 months high again, price did not exhibit signs of being resisted. Hence this trade was not entered.
This trade demonstrated the importance of staying and waiting for a right shoulder to ascertain if the pivot is true or not.
Trading_Colony
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I agree with you on this.
nakedchartist
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Yes Sir. the 2 red lines are 2 months high. if we can see a 2nd test of this resistance level via a right shoulder then we will have a bearish trade with very defined Stop Loss.
U may wish to look at the Dollar Index and u may find the inverse head and shoulders pattern in the process of formation.
EUR is closely related to the Dollar Index.
Will update this again.
This trade demonstrated the importance of staying and waiting for a right shoulder to ascertain if the pivot is true or not.