I could never trade this setup though it turned up to be really profitable. I had waited for price to test the confluence between the support side of the flag and the Potential Reversal Zone (PRZ); but unfortunately, when it finally did, it just zoomed off. Another spot where I could have jumped into the setup was where Dragonfly Doji formed on the support side of the wedge; but unfortunately (again), resistant levels hovered close to it.
On 4-hour time frame, the setup is a bullish flag. Length of leg "1" to "2" was to be targeted after the position had been executed - this is in accordance with the established methodology of trading flags. In this setup, price level 1.5263 had been marked out for target.
As for the sub-pattern, on 1-hour time frame, the famous harmonic "ABCD" pattern formed. Fibonacci retracement tool was drawn from swing "B" to swing "A", and another was drawn from swing "B" to swing "C". The extensions of both tools formed a cluster which was in confluence with the support side of the channel. The region covered by the green lines is the Potential Reversal Zone (PRZ) that sits on a support - I waited for a bounce off the confluence.
Price rallied soon after it tested the confluence so I stayed clear of the trade. I had drawn a trend line joining swing "A" and "C" to mark out levels that could bounce price against me; but, price conveniently broke through it. It formed a wedge (note orange trend lines) which ideally would have made me feel I had been presented with an opportunity to go long after all - but that feeling wouldn't have lasted since as price tested the support side of the wedge and formed a Dragonfly doji, resistance laid in wait close to it. Going long at the level would somewhat mean buying on a resistance.
However, price broke through all shackles and traded high to where I had planned to set my target.
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