I have always had soft spots for Flags. They are very great setups. Yet, there are times they fail or in this case, miss my entry parameter by a few pips. I trigger an execution only when a candle stick tests a significant level (support or resistance) with its close i.e when the bar seems to be sitting on the significant level. Though price had tested the Fibonacci cluster (with a close), I needed price to test the demand channel the same way and bounce. Forex (like life) doesn't play by any established rule; and the aftermath was me measuring the amount of pips I could have made.
On 4-hour time frame, a bullish flag formed. Length of leg "1" to leg "2" is the pole where the blue demand channel is the flag. While setting targets for Flags the length of the pole is often targeted from the inside of the Flag to the outside of the Flag. In this setup, the target would be computed from the resistant side of the channel to the other side of the channel and out of it.
On 1-hour time frame, a sub-pattern formed. This isn't one of the established harmonic patterns though it does look like one (and the label may also suggest such). Fibonacci retracement tool was drawn from swing "A" to swing "B", while Fibonacci expansion tool was drawn from swing "B" to swing "C" and then to swing "D" - Fibonacci retracement-expansion cluster formed as a result (region covered by green lines). The Fibonacci cluster was close to the support side of the channel, so I prepared myself for a "test and bounce" on the channel before going long. It never happened - price tested the Fibonacci cluster, formed bullish divergence and rallied - and it appears I waited forever for what was never coming.
Nevertheless, I would never consider taking this trade if I were presented with similar situation.
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