SAT 20JUL19 G/J WEEK RECAP AND NEXT WEEK ANALYSIS
Ok, a bit of a seesaw last night for me. I am printing the key golden rules for my trading and posting them in front of me so I remember: “If in doubt, stay out!”.
WK 22JUL19: DAY CHART ANALYSIS
The day chart is clearly in a Down Trend, however, there is signs of exhaustion shown by the RSI Divergence and a Morning Star candlestick formation. This is the time where most of my “losses” usually come from. (1) Trying to pick the bottom of the reversal (as I have done a few times last week); (2) seeing opposing signals and jumping from one to the next (again, case of last night).
WK 22JUL19: 4H CHART ANALYSIS
On the 4hr chart, we get more opposing signs, a Bear Engulfing candle at the 786 of the last downswing, is a tempting trade (which I took using the smaller timeframes and unfortunately got stopped out prematurely as mentioned above). Although this candle is sitting under the outer trend line, there is a strong reason why we need to stay out of this one: The pound has taken out the last high and the inner down trend line. In my research on precisely these type of situations, I concluded that the best action is to stay out until the cross forms a King Crown or Gartley “D” point.
The Gartley is my best type of reversal with the highest chances of success (still a chance).
So, provided I don’t forget my plan during the hype of the week ahead, I shall stay out until the G/J has retraced to the 134.30-134.10 (61.8/78.6) fib area AND formed a CLEAR Bull Candle pattern.
IF this happens, we will enter long, IF the pound is simply pausing its down trend and proceeds to resume it (pink arrow), then I would’ve missed on this Short 786 Bear Candle Trade.
But like I said, MOST OF MY LOSSES HAD COME FROM THIS TYPE OF SITUATION
I already made the same mistake and lost a couple of units here!
Let’s wait and see!