Nico.Muselle
Education

EURUSD - classic 2618 trade

FX:EURUSD   Euro Fx/U.S. Dollar
6406 42 87
They say that consolidation is the best time to trade harmonic patterns and this definitely is not a lie.
If you trade bat patterns, usually you take profit at the 0.382 and the . 618 retracement of the AD move.

We have reached that . 618 retracement now and it's time to take profits. And immediately we have another setup, the classic 26.18 (or twenty-six eighteen) trade.

What is required for a 26.18 trade :

1. Double top : the A and C points of our bat pattern
2. Break below close below of the neckline : D -point of our bat pattern
3. 0.618 Fibonacci retracement of previous move : where we take profit now

=> all requirements for 26.18 trade are met.

What is expected to happen :

4. price retracement into previous low (Target 1)
5. 1.272 Fibonacci extension of the previous move down (Target 2)
- a potential completion of an AB=CD pattern

Stop Loss : should go minimum above the red dotted line but it is safer to put it above the structure of the double top , which would make Target 1 approximately a 1:1 risk/reward ratio.
Is a double top only valid at the peak of the price action?
Reply
@revesrenard, if it is not at the peak of the price action, you can hardly call it a top, right ? :)
Once the high of a double top is broken, it is no longer valid as a pattern. Same goes of course for a double bottom.
Hope it makes sense.
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do you guys think that i could be forming a gartley or a bearish crab pattern? if it will go for the crab the target will be around 1.13

any comment?
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Nico you have quite a following! You seem like a genuine cool dude! Love your analyses
+1 Reply
Thanks a lot for you praise ! Will be looking forward to your posts
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Hi Nico, I am a novice and one of your followers. I see on the 4 hour chart a potential Cypher, that is if the price starts going down from here (1.088 at time of writing). What is your idea?
+1 Reply
Mincealors99 Mincealors99
Just realized that I omitted to write that my comment was for the EURUSD.
+1 Reply
No worries, we all make mistakes ... as long as you don't make them while trading no harm is done ;)
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Sorry, I just saw it now and you posted 8hrs ago ... EUR rallying quite a lot today due to poor numbers from the US the whole week
Reply
Be cautious, traders. The imbalances of supply and demand points to a possible bullish reaction.
EURUSD is showing strength: Hidden buying above support area.
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