Eur/Usd CYPHER Pattern 4H

FX:EURUSD   Euro / U.S. Dollar
147 5 9
The C leg of a possibuckle Cypher pattern is on the way. The R:R is worth taking this trade. Good luck.
Trade active
Trade closed: stop reached
I'm not a pro either, but some friendly advice. It said in your description that you wanted feedback. :)

I suppose you traded this as a trend continuation and not a Cypher?
If not, your entry shouldn't be at B. Entry is at D after a valid B-C leg is formed.
But I suppose you probably know this and took this as a trend continuation.

Also, your stoploss is in a dangerous place way too tight. Preferably you should have your stop under previous structure, in this case under X of your potential Cypher.
Your risk reward then would not be as good if you aim for the C point of the potential Cypher as target.
What you should have done then is wait for a deeper retracement to fulfill your preferred R:R, or passed on the trade and waited for the next opportunity.
Alternatively, you could have dropped to your hourly timeframe and waited to see if you got a double bottom. Then you could have placed your stop beneath that.

May I ask what your entry reason was?

Best of luck.
DenizBartu Kjetil_Johannesen
Kjetil , first of all I really appreciate that you explained your thoughts. Helps me improve myself. Thanks a lot for that. :))

Here is the chart that I was working on. It is a bit messy maybe but it might explain my entry reason (which I dont insist a purely valid reason) In the chart you will see a blue cypher which I was expecting BC leg to complete but price touched the weekly descending TL(blue line) and came back. The retracement from there was to 38.2 and the minor TL (red line) So I draw another cypher (yellow) whose C point is almost the same as the first one. Plus D point was exactly intersecting the monthly strong TL (yellow). As a result I placed my entry to the high of prev candle.

About the stoploss I should have put it at least below 61.8 retracement level but not under X because if price passes below 61.8 than this was not going to be a cypher anyway. (yellow one) Still I agree with you that it was too tight. It was a mistake.

I hope this explanation was not messy))) Thanks again for your inputs. I appreciate that.

No problem. :)

So basically, you traded this as a trend continuation, then.
This could have been a trade I would've taken as well, but with a slightly different approach.
I would firstly never use a leg for an advanced pattern as target.
I believe you've locked your mind on these cyphers and putting too much trust in that they would complete each leg perfectly.

I included how I personally would go about trading this.
Firstly, the uptrend is still valid until price closes below x. (My A-point in the chart). That's why your stop should have been below that point.
Yes, that might mean mean that the cypher would've been invalid, but then again you should never force a trade.

Secondly, I would wait and see if price retraced far enough to ensure at least a 1:1 RR.
If it doesn't, pass on the trade and wait for another opportunity. You already had 2 possible cyphers there.

I always trade 2 positions, and thereby 2 targets. I would then put my first target at my B-point (retest of previous resistance).
In your case, you could have used your weekly TL as target, but then you would have to wait for a slightly deeper retracement than on my chart.

I've measured out a potential target for my second position by drawing in an AB=CD pattern, and a cluster of fib extension.
One measured from A-B, and the other one from the previous move up.

I would also want to have more confirmation as a trigger. RSI overbought combined with a double bottom, or a higher high higher close candle for instance.

Hope these tips are of help to you.
DenizBartu Kjetil_Johannesen
That was extremely helpful thanks. Hope to hear comments from you more often. :)
You're welcome.

I'm still Learning as well, so don't base your trades on my analysis without conducting your own, though.
Should have a disclaimer here. :)
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