Predictive/Forecasting Model had already suggested imminent decline (see prior analysis in my threads). In this particular pair, a primary, quantitative target emerges at significant historical structural levels - See line-up of highlights in following chart:
In the background, a nascent geometry is taking shape, carving out a speculative Point-4, so expect a denouement in the following week.
Invalidation levels should be considered at transgression of geometry's Point-2. Again, Point-4 remains speculative as to its final residence.
Per Predictive/Forecasting Model, the outlook turns . As the Predictive/Forecasting Model mulls the data, added qualitative/quantitative targets will be posted as we move along.
Predictive Analysis & Forecasting
Durango, Colorado - USA
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The 2-4 Line of the smaller Geo should impact price as a support/resistance.
YES, the bearish trade is still good, as I mentioned below, but it has to be effected as a HIGHER timeframe ... I will post a new chart ASAP.
From a Geo perspective, where points 5' and 5'' are considered Stop-Losses relative to the core geometry of the Wolfe Wave (i.e.: points 1, 2, 3, 4 and 5), there now is a probable descent into the level corresponding to Point-3 (per "Off-Set Rule" I have established for myself, whereby Point-3 represents the HIGHEST probability of attainment, even if price can still get a bit lower).
In terms of trading strategy, this means that a trader should consider a 70/30, 75/25, or best a 80/20 strategy.
In effective terms, this means that IF and ONCE price reaches the price level corresponding to Point-3 when the Off-Set Rule applies (which is the case NOW), then 80% of the position should be off-loaded, and 20% of the position should remain in place.
The SL is then moved down based on your own risk assessment.
From a pure Structural Strategy level, I would move it at either the TOP of the prior candle, or aggressively at the top 0.75% mark of the current DAILY candle.
This entire methodology would represent an aggressive-forward/conservative profit blend: Aggressive in taking a short at the 5-second, and conservative by defining a SL right at the top of the 5-second candle, and then moving the stop-loss level as defined above.
Please could you give me your opinion and critique on my trade logic and if in your opinion it is reasonable, and how it can be improved. I entered short at the then double top on the 21 May 2015 at 2.14011
I risked 1% of my account and placed a stop 1/3 of the way between the 1.414 and 1.618 Fib extension. Take profit was you target at the 0.5 Fib retracement. Risk to reward was just over 1:1.
Have I made any glaring and obvious novice mistakes or is my trade plan reasonable sound?
I thank you for your time and patients.
Kind regards iefan
My "golden rule" when trading with a Fib scale is that the level of repose, which is the price from which I calculate a Fibonacci extension, HAS TO BE a minimum of 0.382-Fib. Without that, there is no valid extension level, but this is my rule (I used to trade in a trend-following fashion in the past relying heavily on price and Fibonacci's, and that was how I did it).
So, looking at your chart, where "0" is the origin of the Fib scale and "1" is the 100-Fib value, the MINIMUM REQUIRED retracement to the 38.2% level would be required to appreciate a 1.131, 1.272, 1.313, 1.414 and 1.618 pacing of price (i.e.: levels at which price can visibly be seen validating these Fibonacci extension levels)
The use if "Tunneling" on a preemptive basis is a definite must for this geometry.
However, since there is no other way than Fibonacci to confirm a top (unless you are using a supportive algorithm), then I would look for Fibonacci confluence levels ("clusters") based on points 1, 2 and the down-swing infection level above point 2.
Ideally, the 1-2 Leg would express a significance at the 1.414 or 1.618 level, whereas the internal 2-2' (i.e.: upswing end from point 2) would also express a significant Fibonacci level, aligning with the 1-2 Leg.