honkin
Short

Possible Bat Pattern Short

FX:EURUSD   Euro Fx/U.S. Dollar
144 2 1
A simple Bat harmonic pattern developing. We would be looking to go short anywhere between around 1.1362 and 1.1294, once the pattern completes.

We can see the 0.50 retracement of the initial XA impulse leg followed by the 0.881 retracement of the AB leg. Whether or not the D leg reaches the required 0.886 retracement of the initial XA impulse leg remains to be seen.

The zone I would be looking for a reversal in is between that 0.886 retracement of XA and the 1.618 extension of the BC             leg. So long as it does no past the structure high at X, the pattern is valid.

The stop would need to be above X (maybe plot a 1.13 extension of XA, so around 1.1518) with targets being as follows:

T1 would be at the 0.382 retracement of AD (around 1.115, but could even use previous structure at B)
T2 would be at the 0.618 retracement AD (around 1.102)

Of course, it may never get there, but that is the theory behind a Bat pattern .
I did forget to mention that once the actual reversal is completed, the targets are adjusted using the new swing high. This is often higher than the fib calculation taken from AD.

For me, entry was done with a Limit order placed at the 0.886 of XA. Entry was at 1.1362 and the stop is at 1.1518

My initial targets are still as advised, but will be adjusted based on the actual reversal and new swing high.
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honkin honkin
A stop out unfortunately on the EURUSD, but that's the nature of the beast.
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