Harmonic Analysis - page 343
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Thanks Ryu Shin, now I understand your method respecting trigger point... but still have no idea how do you determine the range of SL?... Do you have any rule for it?...
SL is based on previous high/low. Take the pic below. I sold GBPAUD and GBPNZD last Friday. I sold cuz price reached PSL. Price on both bounced down. My target hit on GBPAUD but my target on GBPNZD did not hit. I thought it would go down further but it didn't. I should've placed my target as 1:1 ratio. I will close my short on GBPNZD as soon as the market opens because it bounced down and bounced up. That being said, it could go higher and higher.
NZDCAD - Potential bullish cypher.
SL is based on previous high/low. Take the pic below. I sold GBPAUD and GBPNZD last Friday. I sold cuz price reached PSL. Price on both bounced down. My target hit on GBPAUD but my target on GBPNZD did not hit. I thought it would go down further but it didn't. I should've placed my target as 1:1 ratio. I will close my short on GBPNZD as soon as the market opens because it bounced down and bounced up. That being said, it could go higher and higher.
As I predicted, GBPNZD went higher and higher. I should've bought it.
GBPUSD - The small cypher did not work. Now we have a bigger cypher.
It tried to go up but failed.
Hi Piot,
I recommend you looking at your chart and see the price action.
I search for support/resistance level that has been broken. That is what I call "PSL (Previous Structure Level)." PSL is a level where price bounces when it reaches. Meaning that support becomes resistance and resistance becomes support.
Take a look at the pic below please.
Those orange circles are what I thought a PSL.
A1 was broken and become support. We could say it's a base of rally-base-rally of supply and demand theory. Anyway price came back to the level and bounced and created a support level A2. Later price came down to A2 and bounced again.
The same thing happened to B1 and B2. Price broke the B1 level and came down to the level and bounced (B2).
The same thing again, C1 was broken and price came back to the level and bounced (C2) and kept rallying. Later price came down to the level again and bounced again.
Look at D1. D1 was a support level. It's in the middle of the double top. Imagine double top as an M. In this case, middle of M was a support level and was broken and became a resistance level. Price came back up to the level and bounced (D2), which created a resistance level F1.
Before the D2 was created, price created PSL E1. Price bounced when it reached D1 and came down to E1 and then bounced up and created a support level E2 which later price came back and bounced up again.
The support level E2 pushed price up and broke the resistance level F1. Because of that, there was a potential that when price came down to the level, it'd bounced up. And it did. Also it created a support level F2 which later was broken and there was a potential that if price came up to the level, it'd bounce down. But it did not (F3). However, price came down to the level F2 and bounced up later (F4).
The level G1 was also a failure in terms of break-comeback-bounce. I'd buy when it happened (G2). Price decided go sideways and finally broke the support level G3. Candle stick closed below the level so there was a potential that if price rallied back to the level, it'd be likely to bounced down. And it did (G4). Before it bounced down, it left a support level H1.
Now, H1 was broken recently. There's a bullish cypher pattern completed. That being said, price could go up and if it reaches the PSL H1, it could bounced down (H2).
The hardest thing with trading PSL is to set risk and reward.
I hope what I explained is informative enough for you to figure out how I do.The bullish cypher worked out. Price went up to the PSL H2 where I thought price would go down and in fact it did. Total profit 320 pips.
Structure trade of the day - AUDUSD
As you can see price came back to the PSL in the circle and bounced down. When there's no harmonic pattern, price action/structure trading is the way to go.
PSL failure and success
The PSL (lower) didn't work but the other PSL worked.
I've been on long on the pair for long term. It almost hit my target but then turned and then came back to the entering area.
NZDUSD, AUDUSD - Potential bearish bat.
USDJPY - ABCD completion, hit my target with 135 pips in profit. The reason why I took was because the ABCD completed at 121.80 which was around the recent high resistance level so I thought there was a great chance for it to turn different direction. It took longer than I thought. After the ABCD completion, price went down drastically which made me think it'd hit my target soon.
NZDUSD, AUDUSD - Potential bearish bat.
The bat on AUDUSD worked out very well. It hit my target. I waited to see if it'd come down to PSL around 0.76634 and if it came down to the level, I thought i'd go long for 1:1 RR and it did exactly what I thought.
The other bat on NZDUSD on the other hand, it did not work out as AUDUSD did. It's because of PSL around 0.75069. Price reached the level and went down drastically instead of completing the bearish bat. Price kept going down. Where to? to PSL 0.74007 where I placed a buy limit. And then price bounced up and completed the bearish bat. But I'm not having a short on the bat because the pair reacted when it reached the PSL 0.75069 and the pair broke the level, which means to me that although the pair is reacting because of the bearish bat but it might keep going up when it retraces to the PSL 0.75069 (maybe even higher) and then bounces up. It would not meet my criteria.