Here we have a VALID PATTERN on FX:USDCAD that is close to the completion point. I've also introduce the cloning strategy into this idea. In cloning strategy you just take high and low and draw the reference box, which you then clone and place it on top of the reference clone box. Next you draw the 1/4 (Quarter) Lines by using the tool and these 1/4 Lines can be used as potential targets for long positions. I would also like to point out that we are getting BEARISH DIVERGENCE on the RSI as well. But as always we need to wait for major structure level to be broken, before giving any importance to divergences. For BEARISH PATTERNS the stop loss is placed above the 200% Fib extension of the XA leg. I also included the 61.8% Fib retracement level, which comes in exactly at the CRAB PATTERN'S completion point. See the chart above for more details.
NOTE #1: Personally I would NOT be trading this particular setup due to the larger stop loss. My account capital does not allow me to trade based on WEEKLY CHART. Instead I would be using this setup to look for shorting opportunities based on lower time frames, with smaller stops and targets.
NOTE #2: I would consider this as a counter-trend trade, since the overall MAJOR TREND is still BULLISH.
NOTE #3: If this pattern works out nicely then our 1st target is exactly at the bottom of CLONE #1, which could potentially act as support. Also by using the 1/4 lines we are able to hide the stop loss above the 100% line or above the top part of CLONE #1, which could potentially act as resistance.
I got introduced to the clone strategy from my good friends "nmike" and "GcNaif". Make sure to check out their trading ideas, they are great at trading with the clone strategy.
Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Thank you everyone for all the SUPPORT that you have given me so far, I truly appreciate it. Good luck everyone :)