IMPULSE – CORRECTION – IMPULSE
Daily/4H/1H/30mins timeframe (select only 1)
 Price trailed by 30SMA – ensure strength of first impulse wave (✓)
 Pullback between 30SMA and 150SMA (✓)
 Corrective structure formation with 2×2 touches Pullback to 150SMA + LT-TL and break at ST timeframe distribution refer to remarks
 Stop order at the break of corrective structure with stop loss after swing L/H
 Stop order after price bounce off area of value with volatility stop (✓)
Additional confluences: Support or Resistance, ADX50, Linear Trend Lines, Fibonacci Retracement, ATR and Elliot Waves (refer to remarks). + Bearish Engulfing on Daily
2% capital risked for potentially 1R (automated volatility stop)
1% capital risked for potentially 2R (after shift to real stop)
Open: 0.761| Volatility stop: 0.7746 (-136 points) | Stop loss: 0.7678 (-68 points) | Take Profit: 0.7474 (+136 points)
Remarks: Could have used HTF swing strategy using the 4H and 30 minutes timeframe. HTF swing would have been more objective and more risk management/R-performance friendly. Or even a combination of both.
Currently anticipating Wave 5. Wave 1 was made up of (i)(ii)(iii)(iv)(v). Wave 2 was a rather flat pullback and Wave 4 is a steep one. Wave 3 was very clearly a massive impulse move.
Keying in the trade, use volatility stop placed under/above an established swing L/H or and moving average cross or estimating volatility using ATR.
Real stop loss placed under/above the anticipated swing L/H using 150SMA as a guide.
Take profit calculated using the length of the prior impulse wave rounded off to next nearest swing point/key level.
Once entry triggered and break out, shift automated volatility stop to real stop position. (-68 points)
Extra: Risk halved.
At 50% of 2nd impulse or a swing L/H established, shift stop to break even. No swing relevant swing established: 0.5R secured due to high holding costs on this pair.
At about 80% of 2nd impulse, shift stop to the 50% mark or below/above swing L/H. 1R secured, trade was not closed due to price differences between CMC and TV.
If price breaks and closes under/above the 30SMA, tighten stop loss and prepare for manual exit.
 Initial stop loss
 Trailing stop, as mentioned under management
 Manual exit due to change of momentum and break of market structure
 Take profit
Remarks: As seen price hit TP, but the price difference between broker and chart meant that exit did not trigger. Manual exit as the TP on the broker was below the support level and the trade was meant to be closed by the time it reached this level.