Akil_Stokes
Short

EURUSD: The Next Potential Short on Euro, Bearish 2618

FX:EURUSD   Euro Fx/U.S. Dollar
As price action makes its way back up towards previous structure highs, we’ll reach what I like to call a “decision point” in the market. I call it that because it’s at this point where our “IF/THEN” thought process comes in today play in our decision of whether to go long or short.

Because we have yet to break structure, I won’t touch on the long option, but the short option is playing this current move as a 2618 trade. We have already entered the killzone starting at 1.1120’s and at this point I would be dialing down to your lower timeframes and looking for an entry reason.

IF this 2618 does complete and rollover, it would also be the “C” leg of a potential bullish bat pattern. You guys know how I feel about the “aggressive C” trade (BAD! BAD! BAD!) but this would be one that actually makes sense, only because you have a valid reason to enter.

I’m feeling horrible today as I’ve caught a cold from somewhere, but with A LOT on my trading radar (Syndicate members, take a look at the tradefloor this morning) I don’t want to miss what could be a day ripe with opportunity.

(If you’re unfamiliar with the 2618 trade, the free training is on our website under the “Learn to Trade” tab)

Akil Stokes
Chief Currency Analysis at Trade Empowered
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it is going 1,1350 :))))
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Nice!!!
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If not for :)) in the end,that comment would really be stupid:)
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Great, where can I get this timemachine? :D

OT: Great call Akil, was thinking the same on this pair
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Akil_Stokes PRO RobinOphion
Nice, it'll be interesting to see how it reacts at this current resistance level
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Then 1.15 on it's way into 1.20
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There's actually a bearish Cypher on the hourly as well that was just brought to my attention that can be used as a reason for entry
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fx1 Akil_Stokes
I am already short on the cypher with TP1 on .382 of CD @ 1.11214 and left TP2 with the aggressive C trade @ 1.10178. Will see how everything goes.
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Nice, looks like we're in the same point. Maybe we can find a few more traders to hop on so that we can push this thing down ;-)
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my structure rules are a bit different. i don't think of going down until we have violated (or at least tested) the last upward impulse leg's starting point to the downside. 240 says we have a doubletop (consequently the last impulse is the retest of highs and its starting point is double top's neckline), but my trading tf is 60 wich tells me we are in a kind of complex correction as we are trading within the last upward impulse's range. we can go both ways, i don't see an edge here. once again, these are only my rules))
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Akil_Stokes PRO Alexander_Nikitin
I agree, this can certainly be a complex pullback for a trend continuation move. That's the cool thing about the markets. at some point trend continuation traders and countertrend traders will always bump heads. That's why I recommend to all new traders that instead of trying to be both, pick one side, that way there aren't too many opposing voices in your head. thanks for the comment
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Yes, without opposite views it would be impossible to make a deal. It should be the way it is. If I look for trend continuation I need somebody looking for countertrend. If there are no counter trend fellows, who will sell me whatever I want to buy?))
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Akil_Stokes PRO Alexander_Nikitin
Exactly, "think like the other trader"
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Alexander_Nikitin Alexander_Nikitin
My strucutre analisys rules

Illustration to what I mean))
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jasonny Akil_Stokes
on the daily chart a cypher d leg of 1.1300
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Nice work man, looking to go short there as well !!
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eur it's crazy ,i stop loss
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Is this model invalid now?
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The 2618 trade is still valid, yes
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beckogva Akil_Stokes
Any reason about this spike ? Stats were good !!
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I had a good conversation with a trader about this yesterday. The hard part about fundamental trading is that good stats don't always equal a good reaction and vice versa.
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That spike was 0.8 pips from my stop lol, entered at 1.11733

I'm hoping this sucker drops like rock.
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beckogva JamesBowler
I guess you call the EUR sucker ? hahaha
I hope too ! But it's like nothing can make this euro weak !
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Akil_Stokes PRO JamesBowler
Well done, sometimes we all need a little luck to go with our analysis
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Now lets see what happens next :)
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I'm hoping we got those stops out the way and we can see some relief. As a trader who is short I'd welcome that with open arms
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EGEfx Akil_Stokes
EuroUSD always tricky ,the pair is a great game for sensation seekers..many thanks Akil. Greetings from Turkey...
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I like that term "sensation seekers"
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nice. I didn't catch the wave up. I'll have to catch it on the way down now.
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Maybe the Greek snap elections that pm is about to announce in an hour will trigger the drop we are anticipating...?
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Hey Akil, i admire you and just for you to know i am following your youtube channel and it's great that experienced trades shares his thoughts and experience with plebs
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Akil_Stokes PRO ZheniaNasonov
Thank you, I've gotten such great feedback from that channel that it gets me pumped to do a video each week
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Nailed it Akil ;)
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I was stopped out, appreciate the positive spirit though
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If I understood correctly, the strategy requires you to sell at the 0.618 retracement level. So, you have a pending order?
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Correct the 61.8 is where you would look to sell but depending on the trader and how aggressive they are that can mean a limit order waiting on the 61.8 or using the 61.8 to start the killzone and waiting for a reason for entry once price is in the zone
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PipUnicorn Akil_Stokes
Thanks!
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Asking a pretty silly question here perhaps and making some observations - but I'll take my chances. Be gentle.

Looking at the inverse correlation with the strength of the USDOLLAR, there seems to be nothing magical about the EURO or even the EURUSD pair. The EURUSD is largely at the mercy of the USDollar. And the DAX or example is nearly as well inversely correlated to the DAX (GER30). So - speculations on the EURUSD (and the DAX) rests heavily on the USDOLLAR?
snapshot
If one is betting which ever direction on EURUSD (or the DAX) one might as well do same on the USDOLLAR?
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Akil_Stokes PRO Captain_Walker
I wouldn't call that a silly question, after all how can you receive an answer if you don't ask a question. We had this conversation in my trading room the other day but to keep things short I would say that correlations do exist (in general) but they often tend to change over time depending on various economic conditions. So although it's great for making observations I personally would never place a trade on one pair or index because of something that is happening on another. There are just too many variables.
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Ok.. glad to know it's not a silly question. Hache below says (below) that the Euro can create strenght/weakness independently of the USD action. I can't doubt that at all.

I've found out that that the USDOLLAR index is a composite index comparing the USD against several other currencies (I'm mindful that there is no way to say how strong USD is unless compared to another currency or currencies). That in itself makes USDOLLAR index a robust measure of the strength of the USD. However USDOLLAR is weighted by a geometric mean to 57.6% by the EURO itself (along with 5 other currencies). https://en.wikipedia.org/wiki/U.S._Dollar_Index and http://www.investopedia.com/terms/u/usdx.asp

If the denominator in the EURUSD is the USD strength, then when that denominator increases in size, the result of the EURUSD fraction, must be reduced. The converse is true for the numerator.

In a sense, the weighting of USDOLLAR index by the EURO itself, suggests that it is an inverse, 'mini EURUSD' i.e. USD v EURO (that 57.6% weighting). I imagine that explains the near mirror image of USDOLLAR to EURUSD? The weekly chart captioned in this post shows only one brief period lacking inverse correlation.

snapshot
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Akil_Stokes PRO Captain_Walker
I think what he was trying to say is to make sure that when you're looking at currency "pairs" you keep in mind that it's not only about the strength of any given pair, rather it's the strength of a given pair versus it's competitor.
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I'm no longer too interested in the underlying mechanism - as it's rather academic.

The key point I started off with was the apparent correlation between the form and flow of the EURUSD against USDOLLAR (and I included the DAX which very much mirrors the EURUSD). The question is essentially whether everybody else is seeing what I'm seeing as I described it. I'm a bit worried about me in case I'm not seeing what's on the charts properly. I'm seeing patterns that are mirror images of each other for the respective instruments mentioned. If everybody is is seeing what I'm seeing, then it matters not what the underlying mechanisms are. The key issue is that the inverse patterns exist, are closely related and are real.
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Akil_Stokes PRO Captain_Walker
No you're not crazy, correlations do exisit
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LOL!! I was beginning to wonder.. hey thanks very much Akil for your kind support and reassurance. :))
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Akil_Stokes PRO Captain_Walker
No problem, as i mentioned on your other comment, i wouldn't even waste any energy worrying about it as it will have zero affect on your trading
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hachre Captain_Walker
Since the EURUSD is a pair of Euro vs USD the USDOLLAR value plays a very important role of course. There are times though when the Euro can create strength / weakness independantly of the USD action. For example if both increased in intrinsic value at the same time the EURUSD price would not change because their ratio to one another would stay the same. Currently the markets are heavily affected by China, the US rate hike possibilty and general politicial situations, all of which are things that affect the USD value very directly and profoundly. So the inverse correlation between the two is especially high right now.
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Well said
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Thanks
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Was following this idea today. It looks to me, at least right now, that price action has broken/closed above the decision zone. Of course that could easily change. If it continues to make higher highs, then maybe this could happen.

EURUSD (240): Bearish Bat pattern
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A retest of those highs would be a killer place to look for a short. Lovely resistance area you got there
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Shun-Jiru Akil_Stokes
Looks like another bullish flag.. could hit 1.1280 res line before it traces down. I'm waiting for the reversal entry as well... I thought it was going to go bearish at 1.120ish area. Then I suspected a bullish flag and then jumped to 1.124 area.. I'm guessing there will be another bullish jump. It really does need to retrace sometime soon. I'm with you on this short.

I'm also looking at UJ and UJ is very stiff right now. It might have hit it's bottom at 123.35, but it is acting very weird. You'll see a lot of gaps on the m5. It really hasn't double bottomed yet so it makes me nervous a bit, there might be a chance that EU could go up further. It'll be exciting to see the activity later on today when Asia opens and Europe opens.
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Gaps on the 5min? Try reloading your data, should be that many gaps in forex. I'm looking at a long on Yen as well. Would love to see it come down to the 123.20-123.00 level and provide a sign
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Shun-Jiru Akil_Stokes
ahh that fixed it... i agree.. 123.20 or let's see if it drops to 122.80, still a possibility.
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ajujohn Akil_Stokes
Just want to tell on GBP/CHF a double bottom formed and divergence is seen @ 1HR chart and there is a resistance level o the left of the chart...
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This is why I've said before, harmonic structures or any pattern for that matter, or not enough to make a trade. We must first understand legs, levels, and momo. Nice short at 1.13 coming
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Patterns are not enough. Better to understand legs and momo than harmonics and fibs. See you for nice short at 1.13
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Alexander_Nikitin TradeVulture
Advanced patterns Do have structure incorporated (X-point). ABCD move of a pattern is a complex correction. That's why the pattern is called "advanced". It already contains all the information needed. Keep this pattern's logic in mind. So, the best way to treat patterns is to trade every pattern one can find. Using some filters for confirmation you are risking to miss more profitable patterns than to shift pattern's profitability (unless you have tested every filter you are going to use).
Keeping in mind that ABCD is a complex correction is essential to understand that advanced patterns are trend continuation patterns. But they also work good as consolidation and counter-trend patterns (not as good but still enough to have a positive expectancy).
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TradeVulture Alexander_Nikitin
I'm sorry, not to sound rude and please don't be offended, but this is a retail trading mindset. All patterns are one of two things: accumulation or distribution. They form to provide market liquidity and to setup further market progression within price legs. If a person utilizes all of his timeframes to measure legs, levels, and momo, he can discern whether a not a pattern with fail. This pattern that Akil posted failed because the larger time frame lost support at approximately 1.1300 and has yet to test it while l forming the previous leg down. I have a very good knowledge of patterns, why they form, and what their purposes aim to achieve. Most traders have yet to learn this, because it's very hard to find. I personally haven't read this in any books on trading. This is why I stated: "it's not enough to just trade a pattern". A trader must understand what is happening on all time frames. It's far too much information to share here, nor do I care to try and help those that aren't really interested. If you want to trade every pattern, you can do that. Cheers.
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Akil_Stokes PRO TradeVulture
I agree 100% that every trader should understand how the markets moves. However I would disagree that you can't trade every pattern and be successful. Although, i have a handful of strategies that I trade, for a good amount of time I was strictly an advanced pattern trader. I also have taught many others who have decided to only trade advanced patterns that have gone on to have great careers. So I appreciate you sharing your opinion as their is some great information in their, but I think it would be more professional of you to say "I just don't believe in patterns personally" instead of stating that they don't work. After all we all know that there are hundred of different ways to trade these markets and as long as a trader is consistently profitable then their system/strategy works for them
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TradeVulture Akil_Stokes
Hey Akil. I believe patterns form and are very tradable. Maybe I wasn't clear enough. I've found that many traders do not understand how and why a pattern forms. If they did, their win rates would increase quite a bit I think. It would be beneficial for traders to study accumulation and distribution to apply to all to patterns, not just advanced patterns. But, yes, I agree: trade what works for you.
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Akil_Stokes PRO TradeVulture
I gotcha, and yes too many traders try to skip the basics and jump straight into "what will make me money the fastest" Usually they learn the heard way. thanks for clearing that up
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Alexander_Nikitin TradeVulture
Why anyone needs to increase win rate? Does he want to be always right? If yes, he will fail miserably. Anyone can find himself in a winning trade without any analisys (unless you call clicking mouse an "analisys"). Why do I need to focus my attention on "how and why pattern forms" instead of focusing it on getting trading skills such as predefining the risk, accepting the risk, objective identification of my edges, following my signals without hesitation or reservation and so on? Why should I think about accumulation and distribution instead of focusing on acquiring probability thinking? After one triggers the trade nothing is dependent on his analisys anymore. The outcome of the trade depends only on the next traders stepping into the market. These traders may be complete fools and push the price up instead of down))). No matter how good my analisys is they may push the price in the opposite direction. How can I say in advance who will step into the market after I triggered my trade? So why do I need to think about explanation of the pattern's failure instead of focusing on the exact execution of my ROE?
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IvanLabrie PRO Alexander_Nikitin
Great quote.
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Akil_Stokes PRO Alexander_Nikitin
Great piece there. Although traders may never admit it, I think many still value pride, whether it's them being "right" or looking good on a trading form, over making profit. I've always found it interesting that the ones that are usually successful, rarely talk about themselves being that successful, while those who are not, spend a lot of time telling others why they aren't/ Just a generalization ofcourse but it's interesting if you pay attention
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Yes, I agree. When one acquires skills he no longer needs to promote himself. Others will do it)). It's not only about trading but other professions also)
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TradeVulture Alexander_Nikitin
Thinking about accumulation/distribution, why patterns form etc is not an alternative to risk management. Not sure why you'd think that. Would a trader not benefit in defining risk or even making better trades if he was able to read a chart more soundly? If he can read the charts, he would have much better insight that the pattern would fail, which would possibly help dictate if a trade is taken or not. Reading a chart is a huge edge. Most can't read them correctly. Increasing win rate is directly correlated to profits, but does not dictate the amount of profit. My comments were never intended for risk management. That's a separate issue.
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Alexander_Nikitin TradeVulture
The skills of predefining the risk and accepting the risk have nothing in common with risk management. Risk management is simply a set of rules one needs to obey. But risk predefining and risk acceptance are the states of mind wich keep a trader from being inconsistent. In other words they are trader's willingness to spend some amount of money only to find out if this trade wins or loses. A consistent winner is not trying to guess if the pattern wins or loses imposing more analisys to his daily routines. He knows for sure that it's impossible to predict future, that's why he doesn't even spend any effort on this. Instead, a consistent winner PAYS the amount he predefined to found out if the pattern wins or loses. Don't you see the diffenrence? Sometimes the amount paid returns multiplied (in case of win trade), sometimes the amount paid does not return (in case of losing trade). But no matter, what the results are a consistent winner ALWAYS pay the amount predefined.
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Captain_Walker PRO Alexander_Nikitin
OMG!! Alexander, your words are so golden - I say that totally in honesty. I'm adding your words to my personal mantra which I'm meant to repeat to myself at least three times per week. I've been trying to guess as you say be imposing more analysis - as you outline. I've got to change my way of approaching this totally. I really want to say a big thank you for your precious words. When I make it big one day, you will be remembered - and I don't know you as a person. All the above genuinely felt.
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Alexander_Nikitin Captain_Walker
Thanks, mate. One gets what he is ready to get. If it were not my words it would had been smb else's words. You were just ready to understand. Appropriate time came. Without that readiness even the best quotes of the world wouldn't help)).
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stop loss,,,is it valid pattern?
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The pattern was violated
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Actually, I'm not sure which you're talking about, this feed is getting kind of big :-)
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Akil, I'm also wondering about when people in general say things like "the Euro is strong" or "the Euro is weak". I'm thinking that I can't 'know' the strength or weakness of the EURO unless compared to something else eg. GBP, USD or some other currency. Unless I'm mistaken there is no independent measure of the strength of a currency. For me it's important because I often hear this talk about strength of this or that currency in the news - and I'm thinking, "What are they talking about ? Do they know?".
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Akil_Stokes PRO Captain_Walker
I wouldn't even worry about this Captain, in my opinion just trade what you see on the charts and don't worry about all that you hear on TV. that's a very easy way to get confused and take your mind off of what matters most. What's happening on the chart. If you can read a chart correctly then you'll be able to tell if the Euro is weak or strong
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Same thought.Same target area on this one.
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Akil, this setting is failed . What do you think ?
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What setting has failed?
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If you notice the candle on Aug 14 at 0900 tested you reversal level. Coming back up, we had momo to break through on 2nd touch of that 1187 area. Why? Because we left support that was lost on the leg down(@1.13ish) untested. Take a closer look.
snapshot

This is why I say traders need to understand legs.
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I opened several short positions below resistance level and was so convinced of this setup that I avoided SL, I expect it retraces below 1.17 fibo level, otherwise it will be a very hurting short :S
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Hello Akil, I want to ask your opinion, please give me some advise. for instance, we identify the play to jump in to the trade (let's say Short), then the price has reached that level. for yourself what is the trigger that makes take the short position? you mention about double top or bottom, divergence, and 2618. what makes you feel that "well this is the trigger and this a good time to jump into the trade" ?

Thanks
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Akil_Stokes PRO hansmeister
For a newer trader I would say to choose a set way and do it that way everytime. Which way that is will all depend on your personality. More aggressive approaches will give you more opportunities to catch the move, but you will also be stopped out more, while really conservative approaches will most likely give you a higher win rate, but there will be a lot of trades that you miss waiting for that confirmation. Neither is better or worse than the other in my opinion it all depend son your trading personality
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Mr. Stokes, a question about 2618. Sometimes while waiting for a potential 2618 (let's say double top) to hit the 618, I notice another double top or double bottom form on the same time frame. Does one take precedence over another, should I stay away or stick with the first one? Also there might be a double top on a daily chart and another one on an hourly chart around the same time. Thank you!
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I'd have to see the example to give a clear answer. As far as the one on different timeframes, you should only be taking the one that occurs on your trading timeframe
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Balazs Akil_Stokes
I'll try to find an example, thank you!
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Balazs Akil_Stokes
Here is an example sir, potential 2618 double top waiting for 618 retrace. Then a double bottom is formed and although early in this example attached, let's assume it becomes a valid double bottom? So now which 2618 do I wait to confirm, the top or bottom? Or does the latter invalidate the first?
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Balazs Balazs
 
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Okay, I got you now. You can easily take both. The 2618 on the newly formed double bottom would have no effect on the bigger one that you were waiting on.
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Balazs Akil_Stokes
Here's another one Mr. Stokes, same pair and time frame. A double top and a double bottom, so which 2618 to take?
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Balazs Balazs
 
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If you're a 2618 trader then you take which ever occurs first. Let me ask you this, are you using the 2618 as a technique or is as a trading strategy meaning your trading plan tells you to take every one you see?
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Balazs Akil_Stokes
Gotcha :o) At the moment I'm only trading 2618 confirmations (watched your 2618 was great). I take all 2618 trades that meet the criteria, with the exception of very high time frames, etc.
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Thanks for finding an example, it's a lot easier to see these things then just read about them
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Balazs Akil_Stokes
Thank you very much!
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Akil, I very much appreciate your web presence on Tradingview. It really helps all of us and your wider interests. Keep up the good work!! Jaahhnoooohhhh!! LOL. :))
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Akil_Stokes PRO Captain_Walker
Thanks, i love the fact that the "trading trolls" have decided to leave me alone. That's usually why i don't participate on these types of places.
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IvanLabrie PRO Akil_Stokes
Trolls will be trolls Akil...trading isn't about ego or being right.
Right? :D
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100% correct
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They're only giving you a temporary break. They'll be back, I'm sure. 'People management' in trading is about not letting the trolls run you out of a good thing. One good technique is not to respond to anyone who appears to be a troll. If they're not fed, they can't flourish. ;) :)
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Akil_Stokes PRO Captain_Walker
That's a great plan, I've been doing that and/or responding in a very positive manner. I think that leaves them with a bitter taste as well. I love the term "people management"
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