hey monyont. As far as I know, deep crabs have an xa retracement as 0.886 which looks more likely to be the case here, butterflies are characterized by 0.776.
What’s your entry technique?
i would at least wait to trade until you see price action confirm a reversal on a lower timeframe, either in the form of a head and shoulders, a double top, triple top, wedge, anything that would later lead you to identify a break below close below.
That’s how I take entrances at least. You need to not only identify a pattern, but to figure out what to you is confirmation that your analysis is correct. What type of price action are you looking for to confirm that this PRZ is reacting as you expected? If there isn’t a retest, there is USUALLY a retracement before it continues down.
I have troubles myself too wanting to jump in once you see a pattern complete, but you really can’t trade on patterns alone, you need to have at least one more indication. (Price Action, RSI, Stochastic, etc.)
That one for example looks like you might get lucky and a head and shoulders pattern could complete…
I would expect price to continue on to the 1.618 around 82.20 zone. I havent drawn my pattern as TMB with the 8 SMA as my X, I am just more comfortable with these older techniques and make them work just fine
Look at my Daily Pattern shown. The AB is 3 bars. CD is already 12 bars. That implies CD will be an extension much greater than 100% AB. Also the bar leaving C is a very big long bar, implying once again CD is going to be much greater than 100. The good thing is that price respected the 100% with 2 closes under it. Now that it has gapped up, I expect it to go higher.
Price has broken through the major 50% XA, and is lingering in between there and the 61.8. We can expect price to want to test the 61.8 at the very minimum.
Im not suggesting you long the pair as of now, but I would be very inclined to take any buy patterns (wether they be 5 min, 15 min, 4 hr) on this pair rather than sell patterns until that 61.8 (very close to your 161) is tested.
DrPJ,
i agree with all your points, thank you for your insight… your post have given me some perspective and I have refrained from getting in the trade, the pair is currently testing the hourly PRZ so we’ll see what turns up later tonight…
It seems like a potential alternate bat could be forming on the daily, with a PRZ at 1.13 of XA, would you agree?
We have chosen the same B and C points but would you entertain the possibility that B could be at 81.48 (50% of XA) and C at 79.67, making this pattern a regular bat which could retrace at .886??
thank you for any comments, i really appreciate the feedback!
In my experience (I believe TMB has stated this many times), using the first swing from the A point is the best move… until its 261 is broken on CD extension. However it is always to look at the next swing as additional support/res. Sometimes the first swing provides a convergence zone and the second zone has a perfect AB=CD landing in the same area as your convergence zone.
I would post some charts but its my bedtime here and I gots to be ready for NY tommorow.
Sorry Im not up on the forex lingo, what is PRZ?
Also Im not sure if there is a common 1.13 extension, I always only use 1.0,1.272,1.618,2.0,2.618
PRZ is the acronym for Potential Reversal Zone. It is introduced in Scott Carney’s harmonic trading books. He outlines several patterns and their respective fibonacci alignments, even a few less known patterns like the 5-0 and shark.
I highly recommend the read if you haven’t gotten your hands on it already.
He describes a pattern known as an “alternate bat”, It has a B at .382 of XA and D will be at a 1.13 extension…
thank you for the tip I will utilize the first swing in this case as it seems to create the best confluence,
have a good night and good luck in NY! (I will be asleep then) haha
here’s Carney’s site, it shows a few of the patterns and I found his books to be quite helpful when it came to understanding these fascinating vibratory swings
Heres A pattern that I really want to take during your london session, I might even just leave a limit open. The 38.2/161 is where I want to go short on this pair. There is a pattern on the daily that implies we want to be short. And a failed convergence point on 4 hr pattern, that implies price will push down to 1.0388. Making this 15 min pattern a perfect oppurtunity in my warped mind.
Heres a pattern Im playing today. What I like is that there are two patterns completing in the same location. A major 4 hr pattern 61.8/100, and 1 hr pattern 127/161.
pepper, your pattern seems to be working out as I write. Good luck on it.
I’m currently waiting for 2 patterns.
One on the EUR/GBP. A GARTLEY with D at .886 and expansion 1.00
Im really not sure how to handle this trade. I entered right in between the daily pattern (it wasnt really a 4 hr) and the 1 hr. Pretty much 2 points from the high. I did this because the EUR had really rallied since beginning of london. I simply took what price I could get 30 minutes before london closed as I expected there to be some profit taking.
Does TMB have insight on how to manage this position?, Its only 20 pips in profit as of now. If there Is some kind of retracement at all, its looking to be another 80 pips easy. Im considered that the big bar on Daily up to that convergence point, Im also concerned that the 1 hr convergence was never tested.
Looks like your up, but with the current consolidation and yesterdays price movement I wouldn’t hold on to this trade any longer. If you wish to continue the sell… yes the possibility of it dropping 80 pips is there, but the 4 hour must break 1.24473 first or else your risk being caught in a bad predicament… Your best bet is to take profit now if you have not done so, and re-enter the trade at the retest after a pull back. Be mindful that even though the possibility of reaching 50% of yesterdays bar is very probable, waiting for the buy around 1.24 would be the better trade for there you have 261% CD and the .236 of XA converging for a buy along with additional support. Keep in mind that it is currently “fake out time” so price will not show a true D point until 10-11 am.
-Edit-
3 secure 30 pip trades that last around 20-90min to complete each = 90 pips… and is alot safer and faster to achieve then waiting for a 50+ pip drop. Trust me, I’ve learned this the hard way and have encountered this need “to achieve” more with one trade after scalping 20-30 pips from the market became simply… “easy”. Keep in mind that this system was created to achieve consistency and exponential account growth in a market that is governed by fear and greed. I say this not just to you and every one reading the thread, but as a reminder to my self as well!
Thank you for your insight. I had set my s/l to be and closed half the position before london. I waited till the 4 hr bar closing at 9:00 and got lucky with a few more pips.
I wish I would have taken 30 pips all the times they were given to me. Your words of wisdom definitely hit home. Thanks
1.24856 would be the safest exit and a break of this will take it towards 1.24357. Keep in mind that 1.246 is heavy resistance and a D can form from there to push back up and create a flag before continuation or reversal of the trend.
