UPDATE #1: TRADE: GBPUSD: SELL@1.55950 Alternate Count +241 pips

FX:GBPUSD   British Pound / U.S. Dollar
1022 14 23
I'm going to do a little bit of something different here in this update. First, updating the trade I posted 4 days ago (see Related Ideas: "TRADE: GBPUSD: SELL@1.55950 Shark + Wave C Completion"), prices have declined exactly as expected so far for a nice +241 pips in potential profit (as of the time of this post) and poised for still more downside to come. But first, prices have just about reached the first major hurdle in a MAJOR SR Structure. It has missed it by just a few pips. At this time, I'm going to be using this pause as my TP1 and taking some profit. More on that later.

But now what I wanted to do different was to present to you and ALTERNATE wave count within this update. Changing wave counts mid-trade is not usual but in this case, I think it MUST be considered. Of course, if you have followed my posts, you know I ALWAYS advocate having an alternate scenario if possible to follow just in case I'm wrong. ALWAYS be prepared. As they say, "Opportunity comes to those who are prepared for it".

So in this ALTERNATE WAVE COUNT, I'm disregarding the patterns in the previous scenario. Here is the chart of that scenario:

In the main chart, you can see that I have the previous up move now labeled as wave (1) of a 5-wave             wave (C). And the current decline as the wave (2) of (C). Yes, this means that the much anticipated wave (C) is already underway and we are seeing the retrace of wave (1) now. That also means that the ending of wave (2) will see the beginning of the wave (3) of (C)! This is why I felt I MUST present this alternate count because it correct, a wave (3) is coming soon!

But first to deal with the progress of wave (2). It's not over. It may not hit the MAJOR SR Structure before reversing to complete a wave B of wave (2). Remember, that line that represents the structure IS NOT a fixed level but rather represents an AREA of support. If it does now reverse, it may get back up to the 1.54700 area where if it stalls there would become the right shoulder of a possible H&S pattern and this would complete the wave B. IF it does this and the H&S pattern is set, then a price decline down to the .886 fib level would be about the target of the H&S pattern.This wold also complete the shark pattern. And it's in the Goldilocks reversal zone. ***NOTE*** the . 886 retracement level also happens to be the AB=CD target for and AB=CD pattern on the Scenario #2 chart above (in blue). More confluence to support this alternate wave count.

Wave 2's do have a tendency towards retracing almost all of wave 1's and when this happens, the ensuing wave 3 is usually pretty long. Something to think about.

I've already taken 50% of my SHORT positions off and leaving the other 50% to run. I am moving my stops to just above the minor sr structure level you see on the chart as that is where the shoulder of the H&S should form. You might ask if I am expecting such a retrace, why I would choose to leave some open SHORT positions? Well, because there's no guarantee it will do that. It may just do a sideways consolidation wave B here and then drop down. So if it does, I am ready. I also do not want to use a trailing stop in this case because I want to allow for the possibility of the H&S forming and then heading down without being stopped out before hand.
well, I am long on this pair:( from about 5.4000 and still wondering to close it or wait...
I'm assuming you mean 1.54000. And if you are, I'm wondering why you hadn't closed it long ago? That's a BIG stop you must have on that trade. Or you have very deep pockets to hold a trade for over 200 pips loss! But I would hope you are not one of those that refuse to let go of a trade just because you refuse to acknowledge you were wrong to have taken that trade.
nadziejamala EverythingForex
I've made a common mistake and bought when there is a down trend...
nadziejamala nadziejamala
common for beginners...
It's not a mistake to buy against a downtrend. That's called "counter-trend trading" and it is a common practice among seasoned traders. It's not for everyone but when you know what you are doing, it's very lucrative. You'll see many of my trades are also counter-trend trades. This trade was not. This trade was a trend trade.
+1 Reply
nadziejamala EverythingForex
I should have said: in the down trade "fire" day like yesterday for this pair
I see 5 waves down from sept 18... let see your thoughts
As I said in my trade plan, I'm STILL SHORT on this pair as I had doubts as to any retrace happening just yet. It's still going down more.
+1 Reply
BenHlatshwayo EverythingForex
price is now at 1.5219 ab=cd and there is a pin bar. now what?
EverythingForex PRO BenHlatshwayo
Has not reached my minimum target yet which is the .886 completion of the shark pattern. Still missing it by a few pips. This pair still has more downside to go. How much more? I don't know but it's no the time to go LONG for me. And I don't pay attention to pinbars. IMHO, they are "fool's gold".
+1 Reply
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