Stalking this trade made me remember the lectures I attended few months ago as a fresher. Maybe it might not be directly linked but lets just say I turned the idea of a prisoner dilemma to the Pattern Trader Dilemma.
Woke up feeling great, knowing that I'm about to continue my grind, and given today is Monday I wasn't expecting a busy day.As I was analysing the EURUSD chart, I saw three potential bearish patterns forming, AB=CD pattern ( in the dashed lines), Gartley Pattern( Blue-violet colour ) and Bat pattern ( Sea-blue colour ). Knowing trading is about probabilities, I asked myself what if all these trades turns out as losers? I'm I willing to eat all these losers? Which one should I take? There goes the Pattern Trader Dilemma.
After few minutes of analysis, I decided to take take the Gartley pattern. I'm expecting a deeper CD leg of the Gartley which will increase the risk : reward on this trade. WHY THE GARTLEY? Although the AB=CD would be valid, in order to be safe, my stops will have to be at the same place as the Gartley, hence the pay-off on this trade would not be favourable. But I was interested in the Gartley because it came into the zone I would be interested in taking a short position. And given its deeper CD leg, the pay-off would be great.
What about the Bat? Usually, I would go for the Bat, however, since it's not in the zone, I am prepared to eat the loss on this Gartley and on the Bat, if they are losers.
Woke up feeling great, knowing that I'm about to continue my grind, and given today is Monday I wasn't expecting a busy day.As I was analysing the EURUSD chart, I saw three potential bearish patterns forming, AB=CD pattern ( in the dashed lines), Gartley Pattern( Blue-violet colour ) and Bat pattern ( Sea-blue colour ). Knowing trading is about probabilities, I asked myself what if all these trades turns out as losers? I'm I willing to eat all these losers? Which one should I take? There goes the Pattern Trader Dilemma.
After few minutes of analysis, I decided to take take the Gartley pattern. I'm expecting a deeper CD leg of the Gartley which will increase the risk : reward on this trade. WHY THE GARTLEY? Although the AB=CD would be valid, in order to be safe, my stops will have to be at the same place as the Gartley, hence the pay-off on this trade would not be favourable. But I was interested in the Gartley because it came into the zone I would be interested in taking a short position. And given its deeper CD leg, the pay-off would be great.
What about the Bat? Usually, I would go for the Bat, however, since it's not in the zone, I am prepared to eat the loss on this Gartley and on the Bat, if they are losers.