Our stop loss would potentially be at the purple dotted line below X
Based on an estimate of a potential risk/reward for this trade i have taken the centre point of my and my two 1.618 extensions. Target 1 would be at the 1st pink dotted line (notice how this lines up nicely with support at the D point). (0.382 retrace of A to an estimated D)
Target 2 is our second pink dotted line again notice the line up with resistance above the X leg. (0.618 ret of A to potential D)
Target 1 would give us a 2.25 risk reward which if hit then stops would roll up to break even. If target 2 was hit we would have a 3.5 risk reward.
Of course the market could just rraleigh from here or it could come down and punch through our . The important thing is to look at price action within our PRZ