IF AT FIRST YOU DON'T SUCCEED SHORT! BEARISH CYPHER ON EUR/USD.
So my first attempt to Short EUR/USD failed. That's ok. You can't and won't win them all in the trading business. The market does what it wants.
That said, in my previous post, I mentioned another shorting opportunity in the form of a Bearish Cypher Pattern on the 4H chart. Well, price action is now confidently moving very strongly towards the completion of the identified pattern (we still need to see it complete though).
In further support of the bearish expectation, I anticipate the bullish move currently seen in price action - as mentioned in my previous post (see 2618 Second Chance link below)-, as a relief rally after the break of the Daily Chart H&S (see EUR/USD-THE END OF THE BULLISH TREND link by @Akil_Stokes below).
Further analysis indicates an equal measured move (EMM-) into the kill zone (yellow rectangle with purple border) of the Cypher pattern .
There is also Fib confluence with the EMM and the pattern completion in the forms of:
- 38.2 % Fib retracement from the Head of the H&S to the C point of the Cypher
- 61.8% Fib retracement from the peak of the Right Shoulder of the H&S to the C point of the Cypher
-161.8% Fib extension from C to B to C of the Cypher which incidentally also falls in line with the completion point D of the Cypher
As a final analysis icing on the cake as it were, we're seeing overbought Stochastics across time frames (Daily, 4H, 1H and even Monthly with the Weekly being the only outlier.
IF price action can complete the Cypher pattern , THEN I can begin looking for an entry reason (most likely on lower time frames) into this anticipated trade (e.g lower low lower close (L.L L.C) candle, double top (D.T) in the completion area...).
Stops would ideally be above the X point. However, if the Risk profile is too great (which with the size of my account it usually is with Cyphers and Gartlies on any time frame), my ideal approach (I still consider myself new to trading so I trade with a smaller account and as such I don't trade off the 4H or Higher), I would look for a lower time frame reason for entry in the form of the above mentioned examples (D.T, L.L L.C candle...), to provide an ideal and reasoned basis for setting my stops/responsibly and reasonably managing my risk, while providing a practical basis to get involved in the trade.
IF indeed we get the anticipated bearish move (remember market does what it wants) my targets would initially be 38.2%, 50% or 61.8% retracement of C to D (the highest point established not the anticipated completion point). My next targets could then be a retest of the lows at C.
As a swing trade looking to ride this down to the measured target of the H&S , I'd be looking at about the 1.1247-50s (IF anyone does take this trade, be sure to measure targets for yourself. My method of measurement may be highly different than yours and produce different targets).
So that's my analysis. Thanks for letting me share. Happy Hunting and Good Luck in your trades today, this week and for the rest of the year.
DISCLAIMER: Like most of you here, I consider myself to be new to trading and I'm in the process of learning just like you. Any ideas posted here are my own opinion based on my personal approach to analysing and approaching the markets and do not constitute trading advice or recommendation to trade any financial instrument. You are responsible for the trades you take and are aware of the risks associated with trading. Please do your own homework and analysis and be sure any trades you take meet your own personal rules and plans. Trading involves significant risk and you could lose more than you initially invested (I love trading disclaimers. They have really kept me grounded, kept me positive and optimistic and helped me realise that while there is risk there is also opportunity if approached and managed responsibly and as a business. It was the prime driver for my seeking an education in trading)
That said, in my previous post, I mentioned another shorting opportunity in the form of a Bearish Cypher Pattern on the 4H chart. Well, price action is now confidently moving very strongly towards the completion of the identified pattern (we still need to see it complete though).
In further support of the bearish expectation, I anticipate the bullish move currently seen in price action - as mentioned in my previous post (see 2618 Second Chance link below)-, as a relief rally after the break of the Daily Chart H&S (see EUR/USD-THE END OF THE BULLISH TREND link by @Akil_Stokes below).
Further analysis indicates an equal measured move (EMM-) into the kill zone (yellow rectangle with purple border) of the Cypher pattern .
There is also Fib confluence with the EMM and the pattern completion in the forms of:
- 38.2 % Fib retracement from the Head of the H&S to the C point of the Cypher
- 61.8% Fib retracement from the peak of the Right Shoulder of the H&S to the C point of the Cypher
-161.8% Fib extension from C to B to C of the Cypher which incidentally also falls in line with the completion point D of the Cypher
As a final analysis icing on the cake as it were, we're seeing overbought Stochastics across time frames (Daily, 4H, 1H and even Monthly with the Weekly being the only outlier.
IF price action can complete the Cypher pattern , THEN I can begin looking for an entry reason (most likely on lower time frames) into this anticipated trade (e.g lower low lower close (L.L L.C) candle, double top (D.T) in the completion area...).
Stops would ideally be above the X point. However, if the Risk profile is too great (which with the size of my account it usually is with Cyphers and Gartlies on any time frame), my ideal approach (I still consider myself new to trading so I trade with a smaller account and as such I don't trade off the 4H or Higher), I would look for a lower time frame reason for entry in the form of the above mentioned examples (D.T, L.L L.C candle...), to provide an ideal and reasoned basis for setting my stops/responsibly and reasonably managing my risk, while providing a practical basis to get involved in the trade.
IF indeed we get the anticipated bearish move (remember market does what it wants) my targets would initially be 38.2%, 50% or 61.8% retracement of C to D (the highest point established not the anticipated completion point). My next targets could then be a retest of the lows at C.
As a swing trade looking to ride this down to the measured target of the H&S , I'd be looking at about the 1.1247-50s (IF anyone does take this trade, be sure to measure targets for yourself. My method of measurement may be highly different than yours and produce different targets).
So that's my analysis. Thanks for letting me share. Happy Hunting and Good Luck in your trades today, this week and for the rest of the year.
DISCLAIMER: Like most of you here, I consider myself to be new to trading and I'm in the process of learning just like you. Any ideas posted here are my own opinion based on my personal approach to analysing and approaching the markets and do not constitute trading advice or recommendation to trade any financial instrument. You are responsible for the trades you take and are aware of the risks associated with trading. Please do your own homework and analysis and be sure any trades you take meet your own personal rules and plans. Trading involves significant risk and you could lose more than you initially invested (I love trading disclaimers. They have really kept me grounded, kept me positive and optimistic and helped me realise that while there is risk there is also opportunity if approached and managed responsibly and as a business. It was the prime driver for my seeking an education in trading)
Comment:
The X point of the Bearish Cypher has been violated (price action broke and closed above the high of the X point) and as such invalidating the pattern so I will no longer be looking for a shorting opportunity based on the Cypher.
Back to the drawing board on analysing this pair as that violation would indicate some continued upside in this market.
TIME TO DELETE THOSE DRAWING TOOLS AND START THE ANALYSIS PROCESS AGAIN.
Back to the drawing board on analysing this pair as that violation would indicate some continued upside in this market.
TIME TO DELETE THOSE DRAWING TOOLS AND START THE ANALYSIS PROCESS AGAIN.
Comment:
This has enabled the Bearish Cypher to completed with price action pushing higher than the anticipated completion level which is fine as long has the X point is not violated (price breaks AND closes above the X point).
I'll continue to monitor this pair in anticipation of an entry reason to Short this market if one presents itself.