There is a POTENTIAL that is very close to being filled. It's not filled just. Around this area that the bat would fill, there would also be a valid B point for a POSSIBLE POTENTIAL pattern with a good looking pattern that would follow. I say "good looking" because the completion of the pattern would place it at or near the minor resistance structure again. I am not saying that this structure level is of THAT great an importance but it's there.
I've been trying to get a handle on this wave (4) wave count and so far have failed as per my 2 previous failed trades on this pair. It's always tricky to try to catch the end of a wave let alone a CORRECTIVE wave. But by taking only trades that have a very tight stop loss, I can limit the damage. Knowing that there is a impulsive wave following, I know that any losses suffered as long as they are small, can be recovered easily.
So here, the recent price action has cleared up the wave count picture on this wave (4) significantly. I can now confidently say that the wave (4) is unfolding in a complex WXY pattern and that WXY is a 3-3-5 flat. The Y wave itself is a abc 5-3-5 with the c wave now finishing in 5 waves. But I am waiting on the 5th wave of that wave c to finish with probably one more push to the upside (my current placement of the labeling notwithstanding and to be adjusted as needed to reflect that final move).
CONTROLLING THE DRAWDOWN
If I were to enter the trade now (which I'm not but is a possibility soon pending completion AND price action ), I would placec my stop ABOVE the upper of the larger which could be a strong if reached. From the bat completion to that area would be about 60 pips on the drawdown. Obviously, should prices turn and decline in a wave (5) as I am thinking it will as per my previous analysis on this pair (see Related Ideas: "ANALYSIS #1: EURUSD: In Downtrend But How Far Will Go?"), then that 60 pips or more would be recovered easily.
CONCLUSION AND MY TRADE PLAN
Can this pair keep going up? Sure. Anything can happen and nothing needs to go according to what I say it will. I don't have THAT kind of influence! But by the price action alone, this pair has been positioning for a move down.
I am holding off on entering SHORT for just a little longer. I'm waiting to see the bat be completed AND some type price action to occur before I get in....again! With prices approaching that upper of the triangle, I'm sure there are many SHORT orders just waiting to be triggered. As well as I am aware that the "big boys" also know this and there may be some spiking price action to take out stops before prices move down. This is just ONE of the reasons that I am holding off a little bit longer to see how things unfold. Spiking and reversing would constitute PA to me. This is NOT saying this is what WILL happen. It's just something I'm looking out for.
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Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!
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