We might have a Bearish Gartley on the 4 Hour Chart:
- We have an AB=CD pattern in there
- AB completes close to the 0.618 retracement
- CD completes close to the 0.886 retracement
- Fairly symmetrical time-wise (AB = 30 ticks, CD = 40 ticks - what's 10 ticks between friends?)
I'm a little suspicious of those long bars toward the end of the CD Leg, but the last couple seemed to have gotten a bit more reasonable. RSI(14, 20, 80) shows we're getting close to oversold.
The Risk/Reward's not so good if you exit at the 0.786 Since you have to place your stop above X to avoid invalidation (~ 80 pips risk to 61 pips reward) so you'll have to be willing to either take that bad risk/reward ratio or try to take profits at the 0.618 retracement. Given the daily trend and potential Bearish Butterfly (see related idea), I don't think this will happen so I'm going to stay out of this trade. If you *are* going for the bearish butterfly on the daily and want to go long until we hit the 1.27 retracement on the daily, I'd wait to break above the 0.886 on the 240 and wait for it to be tested before getting in.
For the daredevils out there:
SELL @ 1.4429
BUY @ 1.4509 (SL)
BUY @ 1.4265 (TP)
--------------------------------
Risk: 80 Pips
Reward: 164 Pips
- We have an AB=CD pattern in there
- AB completes close to the 0.618 retracement
- CD completes close to the 0.886 retracement
- Fairly symmetrical time-wise (AB = 30 ticks, CD = 40 ticks - what's 10 ticks between friends?)
I'm a little suspicious of those long bars toward the end of the CD Leg, but the last couple seemed to have gotten a bit more reasonable. RSI(14, 20, 80) shows we're getting close to oversold.
The Risk/Reward's not so good if you exit at the 0.786 Since you have to place your stop above X to avoid invalidation (~ 80 pips risk to 61 pips reward) so you'll have to be willing to either take that bad risk/reward ratio or try to take profits at the 0.618 retracement. Given the daily trend and potential Bearish Butterfly (see related idea), I don't think this will happen so I'm going to stay out of this trade. If you *are* going for the bearish butterfly on the daily and want to go long until we hit the 1.27 retracement on the daily, I'd wait to break above the 0.886 on the 240 and wait for it to be tested before getting in.
For the daredevils out there:
SELL @ 1.4429
BUY @ 1.4509 (SL)
BUY @ 1.4265 (TP)
--------------------------------
Risk: 80 Pips
Reward: 164 Pips
