There is a fine line between success and failure. It is strange how slight changes can make big differences. I didn't even notice (perhaps, I decided to ignore it) I had done something wrong until it was over: against the norms, I didn't set my Stop above the most recent swing high.
This is definitely not the change I would have wanted but an execution as reckless as this calls for only disaster - and I got something close to that.
It was a fine setup: Lower highs formed on 4-hour time frame.I drew the thick black trend line over the Close; and on 1-hour time frame, a thin black trend line was drawn over the Close regarding the same swing highs from 4hr. This resulted to a trend line cluster. That is a reversal zone.
Also, on 1-hour time frame, Gartley formed. Gartley is one of the harmonic patterns. Its Potential Reversal Zone is in confluence with the trend line cluster (region covered by the green lines). This is a good sign. To calculate the Potential Reversal Zone (PRZ), Fibonacci retracement tool was drawn from swing "X" to swing "A"; another was drawn from swing "B" to swing "A", and a third was drawn from swing "B" to swing "C" - The Fibonacci retracement and extension levels formed a cluster which is the "PRZ".
When price turned after it had half-way reached into the confluence, bearish divergence formed (note line on Stochastic). I went Short after this development at 86.95, I set Stop Loss at 87.26 (31 pips -- not above most recent swing high), and target at 86.34 (61 pips - at a lower low).
For levels that can bounce price against me, Fibonacci retracement tool was drawn from swing "A" to swing "D"; another from swing "C" to swing "D"- Fibonacci retracement cluster (indigo lines) formed thereafter. Thick and thin black trend lines are also levels that can stop price from stooping lower.
EVENTUALLY
I always knew price could trade higher into the confluence and spike, I simply just ignored it. When price traded high into the confluence, it spiked and since my Stop was too tight, it was taken out with ease.
I am so much better than this: I ignored the urge to move my Stop because it was only after I had executed the trade that I realized that my target would leave little to desire should I set my Stop above swing "X"; so I was reluctant.
Profit/Loss: -31 pips
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