It's been a while since I took a position on this pair; nonetheless, a familiar pattern formed - a supply channel - and it also ended in a familiar way; although, one which I would gracefully pass . Trade "BULLISH FLAG, HARMONIC PATTERN AND RISING WEDGE" had almost similar circumstances that just put me off even though they both turned out to be quite profitable. I could never trade that setup, and I definitely wouldn't trade this one.
The entire trend was an uptrend so I obliged by marking out a supply channel (note blue lines) formed on 4-hour time frame. It was simple and clear but same couldn't be said about spotting a sub-pattern on 1-hour time frame.
It took a while but I reminded myself to always consider the most recent price action while marking out any sub-pattern; then, the puzzle was solved. It was a Fibonacci retracement and Fibonacci expansion cluster. I drew a Fibonacci retracement tool from swing "1" to swing "2", and Fibonacci expansion tool was drawn from swing "2" to swing "3" and then to swing "3" - Fibonacci retracement-expansion cluster formed (note green lines). Regions covered by the green lines was a reversal zone, and it was a good thing it was in confluence with the support side of the supply channel.
I waited for a test of the channel but it never happened. Though in the mentioned trade, I hesitated solely because price didn't test the channel; in this trade however, I had more reasons to keep me out of this trade.
I had planned on setting a Stop Loss less than 40 pips at 1.0118 (below most recent swing low),and target at 1.0228 (resistant side of the channel); but price bounced off the cluster higher than I had planned for. I couldn't afford that so I stayed out.
EVENTUALLY
I missed a simple + 80 pips ride, but no regret. I would do the same over and over again.
Profit/Loss: + 80 pips
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