SELL EURJPY: FIBONACCI RETRACEMENT CLUSTER AND TREND LINE CLUSTER (Closed)

This is an (almost) exact replicate of the setup "FIBONACCI RETRACEMENT CLUSTER on GBPUSD". I professed that that setup would have been a good trade if the trend line support were to be a few more pips away from my entry.Although, by that I do not mean that price would have traded to the Target given those parameters; but this would have afforded me the room to adjust my position when price eventually bounced off the support.

In this trade, however, I was proffered that luxury.This, like the latter setup, isn't the famous harmonic "ABCD" pattern. Fibonacci retracement tool was drawn from Swing "A" to Swing "D", another was drawn from swing "C" to swing "D", and the two Fibonacci tools' levels stretch out to form a cluster (region covered by the green lines).

Thick black line was drawn joining the Close of recent Highs on 4-Hour time frame and the thin black line was drawn joining the close of swing Highs on 1-Hour time frame -- together they form a trend line cluster. This cluster is in confluence with the Fibonacci retracement cluster.

Since price didn't make it high enough into the confluence, I knew it was only a matter of time before it found its way back. It did. Formed a higher low and a bearish divergence (note line on Stochastic) as a result. When price traded into the confluence and formed a bearish bar, I went Short: Sold at 133.02, Stop Loss at 133.44 (38 pips) and Target at 131.03 (199 pips) (a Low lower than the most recent low). I set a trailing stop of the same magnitude as my Stop Loss in accordance to my Entry Rules.

EVENTUALLY


Price declined; made it past the trend line support and for some reason outside my conventional technical tools rallied high. It's a good thing my Trailing Stop had locked in 12 pips before it was taken out.

Profit/Loss: + 12 pips

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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.