We don't open a short trade as soon as the PRZ is reached anymore.
The PRZ (Potential Reversal Zone) is an area where price is likely to reverse given the confluence of several Fibonacci levels. Before we open a trade, we have to analyse the price action in the PRZ. Ideally, all the three lines of the PRZ should be touched (tested) before the reversal takes place.
Here we have a bearish Bat in an uptrend. What gives us more confidence that the pattern could be successful is that the bottom trendline of the up-channel is quite far away from the PRZ and the PRZ is at a level where there was a great amount of supply in the past at point X.
Comments
ForceFollower
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I'm looking to exit my long position just below 0.85. But maybe it'll get to your PRZ too. Unless it retraces deeper from where it is now.
dvarrin
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For my rules price action will have to test the whole PRZ. If it doesn't I won't trade the pattern. Let's see ;-)