View: Blanks of the trader
Blanks of the trader
Due to the recent sideways action across many markets lots of traders prefer to stay away till the dominant prevailing direction will kick-in. However for pattern traders this is ideal situation to take advantage of the setups that become available due to market participants indecision. Firstly coming back to last week, i had my USD/JPY short opened at 96.51, having a safety cushion of parallel option CALL for 97 gave me opportunity to stay in position when market broke anticipated level twice before moving the "right" direction. Again there is clear benefit of using options with main position when market hesitates, in this case i would be forced to cover my short position partially based on the rules of my previous trading plan. Long story short, at the moment target 1 was hit at 95.20's area netting +140 pips of profit while weekly CALL option expired out of the money netting minimal loss. One more short position got filled last week on South African ALSI40 index spot market. The Shark posted couple of weeks ago pattern got very very close to ideal completion, i did front run my orders earlier to get my fill at 36460's area, where this market stalled earlier. Since then there was initial move south, still far away calling it winner, but having +250 pips on the balance does not hurt the margin.
Next week promises lots of action, as mentioned earlier lots of chopiness and noise, meaning lots of advanced pattern setups as an outcome. French CAC40 index has potential bullish Cypher pattern to be completed at 3796's area. This market is still very much in bullish/sideways phase, with this setup completed will provide opportunity to take advantage of dominant direction.
EUR/USD FX pair has another Cypher pattern with prevailing bearish direction. The pattern was completed last week at 1.3088's area, will be watching market open to see whether to take advantage of this setup or leave it to other traders. One thing and potential drawback of this pattern and the one above is risk/reward ratio as target 3 has to be hit in order to get 1:2. With this in mind if taking this trade, the position has to be managed very carefully, perhaps moving stops if the targets are hit initially instead of taking profits with inverse risk/reward ratio.
Gold (XAUUSD) has been very choppy recently, even on 4hrs chart there are many patterns shaping up, if scrolling down to lower time frames day traders will likely to have even more fun with this market. The one that is the most appealing for me at the moment is bearish Gartleys that should complete at 1613's area at the point where it should hit 200 MA from north. Very good potential risk reward on this setup.
That will sum up this week, congrats to F-1 fans with new season great start and Kimmi's win, grasping lots of similarities between trading and F-1 ecosystems worth separate blog entry.
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