Today iv Identified a very precise Bearish crab pattern, this thing is one of beauty, its been a while since iv ID'ed a pattern where price has respected the fib ratios so precisely, so for the brake down of What your looking at. . .
Gold lines - fib ratios
Blue Dotted lines - Fib retracement tool drawn from X to A point and B to C point.
Blue reversal bar - Potential reversal zone. (PRZ)
Blue circled ratios at the top
1.618 - which is the one if the most important ratios as its known as the golden ratio, i was the fib line from the B to C retacement tool.
2.618 - is the complementary ratio but is also a 61.8 and the 2 top ratios happen to come together and price has literally bounced almost exactly from these ratios at the PRZ.
Blue circle at the bottom
0.618 - is the B point from the blue dotted line drawn from X to A point again another golden ratio, the price has retraced again almost exactly from this level.
Terminal price candle - i haven't highlighted this on the chart but is the bullish candle that reverses in the PRZ after touching the 2.618 and 1.618 ratios
Right now within this set up we are looking at 3 golden ratios, a very harmonic pattern set up indeed, look how the price has acted like a magnet to these levels i personally think using Fibonacci methods of analysis are truly remarkable, don't get me wrong you wont see this all the time but when it does happen you can know your looking at a high probability set up which is what your looking to achieve i harmonic trading.
its interesting to see how this trade will play out ill update as this trade unfolds
Entry - Close of today candle (i personally don't like waiting until midnight until the candle changes to enter so usually just any time in the day on a daily chart)
Stop loss - 2.0 projection level above the 1.618 drawn from X to A point (always use a stop loss)
Take profit - at the 0.382 or 0.618 level drawn from A to D point which ever you feel comfortable with
I personally have my own money in this trade so you know i have a bit of skin in the game from the information i'm providing to you.
Any questions please do ask i love helping
have a great day
Gold lines - fib ratios
Blue Dotted lines - Fib retracement tool drawn from X to A point and B to C point.
Blue reversal bar - Potential reversal zone. (PRZ)
Blue circled ratios at the top
1.618 - which is the one if the most important ratios as its known as the golden ratio, i was the fib line from the B to C retacement tool.
2.618 - is the complementary ratio but is also a 61.8 and the 2 top ratios happen to come together and price has literally bounced almost exactly from these ratios at the PRZ.
Blue circle at the bottom
0.618 - is the B point from the blue dotted line drawn from X to A point again another golden ratio, the price has retraced again almost exactly from this level.
Terminal price candle - i haven't highlighted this on the chart but is the bullish candle that reverses in the PRZ after touching the 2.618 and 1.618 ratios
Right now within this set up we are looking at 3 golden ratios, a very harmonic pattern set up indeed, look how the price has acted like a magnet to these levels i personally think using Fibonacci methods of analysis are truly remarkable, don't get me wrong you wont see this all the time but when it does happen you can know your looking at a high probability set up which is what your looking to achieve i harmonic trading.
its interesting to see how this trade will play out ill update as this trade unfolds
Entry - Close of today candle (i personally don't like waiting until midnight until the candle changes to enter so usually just any time in the day on a daily chart)
Stop loss - 2.0 projection level above the 1.618 drawn from X to A point (always use a stop loss)
Take profit - at the 0.382 or 0.618 level drawn from A to D point which ever you feel comfortable with
I personally have my own money in this trade so you know i have a bit of skin in the game from the information i'm providing to you.
Any questions please do ask i love helping
have a great day
Comment:
This is the trade
Comment:
Comment:
of coarse good money management rules still apply
once trade has hit the first take profit you can either exit the entire trade with a profit or exit half the position and let the trade ride a bit more if the market is delivering the opportunity, when the take profit target is hit the dtop uct be brought to the entry level at least or just below it, please be aware that trading carries risk and they trade could fail and hit the stop, please only risk no more than 3% or your account
ill update this trade as it goes along
once trade has hit the first take profit you can either exit the entire trade with a profit or exit half the position and let the trade ride a bit more if the market is delivering the opportunity, when the take profit target is hit the dtop uct be brought to the entry level at least or just below it, please be aware that trading carries risk and they trade could fail and hit the stop, please only risk no more than 3% or your account
ill update this trade as it goes along
Comment:
Typo: when the take profit target is hit the "stop it MUST" be brought to the entry level
Comment:
so this is the crab pattern structure drawn with the tool for reference, as this trade was taken on a Daily chart the true beautie about it is that it takes minimal time to manage once your in the trade it took me about 30 minutes to identify the pattern work out my position size stop loss and take profit and enter the trade and only about 5 minutes a day every morning to manage the trade once in it, so far so good the market seems to me showing signs of a reversal
Comment:
At the moment the trade has gone severely against the original open price so i know what your thinking, your thinking "hay ben why you giving me these crapy ideas" well not to worry as unfortunately im not 100% correct 100% of the time but thats not to say we aren't going to still make money on this trade if you've ever seen the big short the main character Dr Mike burry the fund manager held on to his position for years before it paid off he was also forced to pay premiums when the credit default swaps went against him and had liquidate some of the funds capital to even service this trade befor it made profit, so the good news is it has not hit the stop yet and the trade is still on patience is a virtue good things come to those who wait
this is a pic of where the price is now and the price is just below the 2.0
this is the pic to show the trend is clearly down so we can expect a strong reversal
and this is a pic of a audcad which has a 93% corrolation to the nzdjpy pair which also has a near whats called a PERFECT BEARISH CRAB
this is a pic of where the price is now and the price is just below the 2.0
this is the pic to show the trend is clearly down so we can expect a strong reversal
and this is a pic of a audcad which has a 93% corrolation to the nzdjpy pair which also has a near whats called a PERFECT BEARISH CRAB
Trade closed: stop reached:
unfortunately this price on the NZDjpy would have been reached and a loss taken on this occasion only a small loss wold have been taken but there is another opportunity to get in on the audcad pair the odd are as the price had stalled at the 2.0 level so far it most likely will start to reverse but it has gave way for a trade on the audcad these 2 pairs have a 93 percent correlation according to myfxbook.com
Comment:
Had you stuck to your guns and was feeling lucky on this trade, where i originally put my stop is at the 2.0 fib level and at this point the market would have technically taken me out of this trade, i personally moved my own stop just further up which you should never do in forex trading but i did this because i have seen these types of crab trades befor wear the market goes for a final push upwards or downwards on a crab pattern and then goes in the desired direction, as you can see the NZD plummets against the yen within 31 or so days.
Comment:
The AUDCAD is doing well also, as these pairs a closely correlated this was also a terrific CRAP set up