Light Grey - - D leg completion at 1.0818
Dark Grey - - D leg completion at 1.1366
Price has now broke and closed below the the B leg of the , this should now act as resistance before a move lower.
Taking a Fibonacci of the C to D leg of both the and gives us a .382% Target 1 at / support, which is a perfect area to take of half of our position and move stops to break even.
- Stop Loss below / above X
- Target 1 at . ( Once Target 1 is achieved, half of position taken off and SL moved to break even )
- Target 2 at .
However below i have outlined some basics.
- Advanced patterns usually form when a correction of the overall trend is taking place and will look like the letter ‘M’ or ‘W' depending on a bullish or bearish pattern.
- Each price correction is broken into 5 letters X,A,B,C,D which must complete for any advanced pattern to be valid.
- Once the C leg has hit we then look for a D leg completion at which point we will look to buy or sell depending if it is a bullish or bearish pattern. Once price has broken the B leg (1.0890) it indicates price is strong, this could signal we will get a D leg completion.
I hope the very basic information above is a little more helpful.
If a pattern has a deep Fibonacci completion, the D leg can and will on many occasions complete at eather resistance or support.
D leg completion at S or R would add more confluence and give a better risk reward.