On the technical side, it has been ranging in a precise 290 pip wide on the hourly for the last 28 days. We can now see the contour of a 5-point extension structure taking shape: a pattern. The price did pass the B point and then retraced back up, but the , normally found during retracements in a downtrend, indicates this might be heading for completion. With that it became a trade candidate and earned a place on my watchlist. I defined the potential reversal zone (PRZ) for this , by charting the projection of three levels. I: the 1272 expansion of XA, II: an AB = CD pattern and III: the 2618 BC expansion. This defines a clear 28 pips wide zone, represented by the orange lines in the chart.
Should price action test the PRZ, stabilise and reverse convincingly, I would enter long in spite of the . I am simply playing a pattern recognition probability game and harmonics are a high probability reason to enter a trade. There is a 4H from 2013 near this area, increasing the edge of a reversal in case of completion of the pattern. SL goes 10 pips behind the next (which is daily support). TP1 = of AD and TP2 = of AD.
There are 215 pips to be gained and the trade has a reward – risk ratio of 2.8!
UPDATE: Price action for this trade candidate did not test the PRZ and never gave an entry signal so I did not enter. On to the next trade.
Thats what i got :)
I highlighted for you the red dotted Trendlines... i like these ones being broken and retest over and over
2 times downside touches...2 times upper touches...
PLUS your Buy will come aline with the 4h Channel
PLUS we got a fibonacci extenstion of the prior Move.
Could work out nicely :)