Having suffered loss of 40 pips on this pair (Gartley on EURJPY) in very recent time, I courted thoughts of the opportunity to have a revenge. I am never the type to condone violence but I suppose I can, with no doubt, forgive myself if I deviated from my norms.
Drawing Fibonacci retracement from "1"(refer to the screen shot) to "3",and another from "2" to "3" gives Fibonacci retracement cluster (green lines) which trend lines passed through. The trend lines -- thin and thick black trend lines -- were drawn using the Close of swing lows on 1-Hour and 4-Hour time frames respectively. The confluence between Fibonacci cluster and trend line is a good spot to go Short.
Seeing price form Shooting Star on the confluence and Stochastic indicating bearish divergence (note line on Stochastic), I went short at 135.52, Stop Loss at 135.86 (30 pips) and target at 134.42 (110 pips). The Indigo trend lines are potential support levels. The idea behind setting Target at a lower price than the most recent low is that since price formed lower highs and lows in recent times -- downtrend -- it is logical that should the downward move continue, price will stoop lower.
EVENTUALLY
Price declined as the confluence held; broke the thick black trend line and down to the trend line cluster formed by indigo lines. Price bounced off the cluster after which it formed a Market Structure Low. Though I have a strong impression that price will decline (I see this upward move as a temporal move to test the thick black trend line which had just been broken), since this conformed with my Exit Rule, I had to close the position. But I will be watching to capitalize on any bearish signal.
Profit/Loss: + 20 pips
0 comments:
Post a Comment