SELL AUDJPY: PRICE DECLINED + 99 PIPS TO TARGET AFTER A BOUNCE FROM TREND LINE

I posted BEARISHSETUPS ON USDCHF AND AUDJPY a few bars before I executed this trade that I always knew price would test the trend line before declining. I reached that conclusion from experience; so, I waited even though dojis formed inside Potential Reversal Zone. Some recurrent setups that can be treated almost the same way often justify the feeling that trading is easy after all and can be fun.

The overall trend is a downtrend and can be best spotted on 4-hour time frame. Fibonacci retracement was drawn from swing “1” to swing “3” and another was drawn from swing “2” to swing “3”; the resulting cluster is the region covered by the green lines.

As for the sub-pattern, harmonic butterfly pattern formed. Its “PRZ” is the region covered by the indigo lines. The clusters are in confluence and it’s a good sign. However, since a trend line was just above the confluence, I knew (from experience) to wait for a bounce from the trend line before selling.

Price faked-out and I sold at 81.72, Stop Loss at 82.21 (49 pips – sadly this is above my set limit), and target was set at 80.73 (99 pips – at the support). Since “B” is a lower low to “A”, I figured price would likely break the trend line – I set my target there anyway.

EVENTUALLY

The decline was almost uninterrupted, and the trend line was broken.

Profit/Loss:  + 99 pips

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About Moshow

Oseni Moshood ( Moshow) is a physicist, a blogger and a spot trader with years of experience. He trades only price actions partly because he thinks Economics is boring; or, probably because he failed Economics; and he loves fine artistic works.