We also had a retracement of 0.737 of AB, giving us the possibility of a Perfect 222 . Had that retracement gone as far as the zone between a 0.786 and , there was even the possibility of an Aggressive C entry, riding price up to the completion of the .
The Reversal Zone will be around the confluence of the of the initial XA impulse leg and the of the BC leg. This would be somewhere between 0.6685 and 0.6679. The easiest entry is a Limit order placed around there.
If you wanted a little further confirmation, you could plot an , which puts a further possible reversal point around 0.6694, so the Reversal Zone would now extend from there down to the of XA at around 0.6679, a zone of around 15 pips.
Stop would need to be above X, somewhere around 0.6772. I use a 1.13 extension of XA for that stop, but you may decide on an ATR stop. Whatever works best for you.
Targets would be as follows:
T1 at the of AD - so around 0.6598
T2 at the of AD - so around 0.6548
Be aware that T1 leaves us with a not quite 1:1 risk to reward, so if that does not fit within your trading plan, then you would need to make a decision as to which way to go.
Of course, the pattern may never complete, but if are your thing, this is how you trade a
My apologies for not laying out that aspect of the adjustment at the time of publishing the trade. The principle is the same, but the initial calculation of targets was made from the estimated D completion point. As the actual reversal was slightly higher, the targets are adjusted accordingly.
T1 has already been reached with 50% of the trade closed and the stop has been moved to breakeven.