A-B-C-D Trade - page 13
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O.K., we have stopped out as there was no thrust. Good learning lesson. While it can revert back up, what we saw was a lack of thrust during this time period. It did expand to the FE 61.8 but that was all.
Going back to a guru's comment that the FE 100 is reached about 40% of the time on expansions, here is an example of just hitting 61.8.
Rash of Japan economic data, as we watch early Asia, sent EUR/YEN lower and thus dragging EUR/USD.
EURUSD tested the U.S. session low of 1.2320 but back off.
Let's wait untill the dust settles.
Note: there is a tab in this site's front page that has the economic calendar (major events).
The 01:00 GMT5-min candle did not confirm below US low of 1.2320. Waiting for next candle or two to see if it closes below that price.
OK, we're in a Sell after confirmation of 5-min candle below US Session low of 1.2320. Entry filled at 1.2313.
Target FE 100 = 1.2284
I'm going to add the 3-pip spread and 2 pips for cushion. Auto exit at 1.2289.
Stop-loss above 1-min pivot of 1.2328 + 4 pips = 1.2332.
Risk = 18 pips
Reward = 24 pips
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C-D now pausing at the FE 61.8 with small bounce to 1.2314[ATTACH]5946[/ATTACH]
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Update: newer chart shows bounce to US low, but now has returned to downward action.
As it's nearing our stop of 1.2328 (+ 4 pips), just want to explain using that figure off the 1-min pivot.
It enabled me to keep the risk/reward good and above 1:1, versus using a price just above Point C (1.2342 + 4 pips).
OK, we have stopped out. Let's examine something. The attached chart, I plotted a retrace from the newly established bottom. If I was on my toes, I wold have moved my stop to just above the 78.6 retrace fib. That was only a 3-pip difference and still would have kept my risk/reward ratio under control.
Could of, would of, should of.
Continuing the lesson on how to blow a trade, we redraw fibs based on an apparent new Point C and thus a new ABC pattern. That ABC placed FE 100 at 1.2289 per attached 5-min chart.
OK,the extension is back on track. Tight and most recent ABC pull:
FE 100 = 1.2289
FE 127 = 1.2278
FE 161.8 = 1.2263
A-B considered by me to be small, so let's see if it hits the FE 161.8
What the pair is telling me is that we need to use the 1-min and combine the 2 ABCs, per attached chart.
It bounced off of 1.2282, which is close enough to the FE 161.8 now that we have redrawn the ABC.
Still, no thrust and might be related to the lunch hour in Toyko....lol.
In any event, if we pretend to be still in our trade with an entry price of 1.2313, we need to think about exiting our position soon it if doesn't make another attempt downward.
Well,time to pull the plug on our imaginary short trade form the previous charts.
Looking at the attached 1-hour with fibo fan and retrace fibs, I waited for the pair to break the fibo fan 61.8% fib the last 2 hours. Instead it squeezed itself between those 2 S/R points, the 38.2 retrace fib acting as resistance.
Asia headed for weekend with Europe/UK to follow tonight. U.S. has 3-day weekend forthcoming.
Cheers