LOOKING AT EURJPY: SYMMETRY TRIANGLE IN A DEMAND CHANNEL (Updated)

A demand channel formed on 4-Hour time frame. Coming down to 1-Hour time frame for a good and precise entry point, a symmetry triangle which seemed to be half-way out of the demand channel formed.

I recall I had taken a trade similar to this (shot not captured on blog) and I'm aware it ended with price threading its way to the resistant side of the channel. In comparison to my earlier trade on USDCHF, this is an easy trade. A reversal candle stick pattern on the support side of the symmetry triangle is a sign to go Long; Stop Loss below the recent swing low ( 25 to 30 pips maybe) and a target at the resistant side of the channel ( a little over 100 pips). I do not expect the resistant side of the symmetry triangle or the lower part of the channel to stop price from getting to its target. In my opinion, it will be smooth ride to the Target. However, I will be wary of what the Stochastic has in store.

EVENTUALLY

I never got to enter this trade -- it went off without me. I waited for a reversal bar to form on the resistant side of the symmetry triangle but it didn't form. Price rallied with thick bullish bars. Like I had rightly predicted, it broke through the resistant side of the symmetry triangle and lower part of the channel. But before the Bears could start counting their eggs, bearish divergence formed (note line on Stochastic) and price declined afterward almost at the same rate as it had rallied.

About Moshow

Oseni Moshood ( Moshow) is a physicist, a blogger and a spot trader with years of experience. He trades only price actions partly because he thinks Economics is boring; or, probably because he failed Economics; and he loves fine artistic works.