formulate a trade idea – your analysis, a likely possibility // set-up play out
Same idea as T9. Weekly downtrend and a diamond reversal pattern has formed at a resistance area. Pattern is almost complete and a massive downtrend could be coming soon. Planning to remove take profit level and add positions if there is strong bearish momentum.
trigger for the mentioned idea, what you want to see: clean impulse + choppy correction
Bounced off an area of former support now turned resistance. Possibly a ABCDE expanding triangle – the 3 wave pattern is clear on waves D and E.
TREND on entry timeframe & 4H chart, determined by SMA if subjective (✓)
IMPULSE registering ADX>25 (✓) ADX50
COIL structure clear formation relative to prior impulse (✓)
Flag // Rectangle // Pennant // Wedge // Triangle (Expanding) // Diamond
Fibonacci 50%–61.8% // S&R Level // Trend Line // Moving Average
Simple // ABC // ABCDE // Extended Combo
Entry @ Break of Structure // Area of Value + Candlesticks
Stop Loss @ +1ATR away from last wick // Before Impulse Start
Take Profit @ Length of Prior Impulse // Next Area of Value
1% capital risked for potentially 3R
Entry: 2.99 | Stop loss: 3.11 (-12 points) | Take Profit: 2.61 (+38 points)
Remarks: Should have watched the market closer and adjusted the entry and stop loss orders after the inside bars for a better risk to reward.
If running >1R + swing established, risk halved
If 20% left to take profit, shift to break even – as planned let’s see if it breaks out (down)
If strong momentum + space to run + aligned with long term view, extend take profit and use trailing stop
Manual. Reason: More waves for the structure? Manually closed to mitigate the loss on the additional trade which was wicked in. Quite clear there might not be a break out. Will be looking for a swing short term buy and then sell again once it reaches the top until it breaks out (downwards) or the whole big structure changes.