It has been a while since I have been graced with a pattern as good as this. Such perfection! Everything was totally in place: pattern from 4-hour, sub-pattern from 1-hour, a second sub-pattern from from 1-hour to further affirm my stance. I had calculated, objectively, the most probable outcomes for a Short position in this setup.
On 4-hour time frame, Fibonacci retracement tool was drawn from swing "1" to swing "3"; and another was drawn from swing "2" to swing "3". Fibonacci retracement cluster formed (note region covered by the green lines). That is a sell zone.
On 1-hour time frame, Fibonacci retracement tool was drawn from swing "2" to swing "3"; and Fibonacci expansion tool was drawn from swing "3" to swing "4", and then to swing "5". The Fibonacci retracement-expansion cluster (indigo lines covered by the green lines) formed as a result was in confluence with a the Fibonacci retracement cluster.
Also on 1-hour time frame, symmetry triangle formed. The resistance of the triangle laid in wait for a test along side the Fibonacci clusters. That was good enough reasons to consider that price would decline after a test. But it was bettered by a bearish divergence (note line on Stochastic).
When price tested the confluence and closed with a bearish bar, I executed a Sell order at 132.49, Stop Loss at 132.73 (24 pips -- previous swing high), and target at 131.03 ( 146 pips -- a lower low). Overall, this is a downtrend (best viewed on 4-hour), so it's logical to perceive a further decline in price beyond the most recent low. However, I do make it a priority to mark out supports before my target. The trend line cluster can bounce price against me.
EVENTUALLY
Stops lower than 25 pips always mean increasing my position size. I may have over done it here because it appears the stop is too tight. It could have been a few pips (lower than 30-pip stop though) above the swing high.
Before the decline could begin, I was taken out by spread. It annoyed me. Price declined afterwards, tested the trend line cluster, formed a long-legged doji and rallied.
Price didn't make it to my target but trailing stop would have locked some profits down, leaving me with reasons to smile.
Profit/Loss: -24 pips
On 4-hour time frame, Fibonacci retracement tool was drawn from swing "1" to swing "3"; and another was drawn from swing "2" to swing "3". Fibonacci retracement cluster formed (note region covered by the green lines). That is a sell zone.
On 1-hour time frame, Fibonacci retracement tool was drawn from swing "2" to swing "3"; and Fibonacci expansion tool was drawn from swing "3" to swing "4", and then to swing "5". The Fibonacci retracement-expansion cluster (indigo lines covered by the green lines) formed as a result was in confluence with a the Fibonacci retracement cluster.
Also on 1-hour time frame, symmetry triangle formed. The resistance of the triangle laid in wait for a test along side the Fibonacci clusters. That was good enough reasons to consider that price would decline after a test. But it was bettered by a bearish divergence (note line on Stochastic).
When price tested the confluence and closed with a bearish bar, I executed a Sell order at 132.49, Stop Loss at 132.73 (24 pips -- previous swing high), and target at 131.03 ( 146 pips -- a lower low). Overall, this is a downtrend (best viewed on 4-hour), so it's logical to perceive a further decline in price beyond the most recent low. However, I do make it a priority to mark out supports before my target. The trend line cluster can bounce price against me.
EVENTUALLY
Stops lower than 25 pips always mean increasing my position size. I may have over done it here because it appears the stop is too tight. It could have been a few pips (lower than 30-pip stop though) above the swing high.
Before the decline could begin, I was taken out by spread. It annoyed me. Price declined afterwards, tested the trend line cluster, formed a long-legged doji and rallied.
Price didn't make it to my target but trailing stop would have locked some profits down, leaving me with reasons to smile.
Profit/Loss: -24 pips
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