I don’t publish all my trades obviously, but every day I am a couple of hours in the forex chat, where I share thoughts about the market and pairs I am watching. The chat provides a more instant way to share views by posting quick charts of trade ideas in real time. Last Thursday I posted a snapshot of a EURGBP setup -before going short- when price was smack in the middle of the potential reversal zone of a Gartley pattern and I was anticipating a reversal. It would become one of my best trades of the week since the euro was facing selling pressure as the results from the UK general election sent the pound higher across the board, though developments in the Eurozone also had an impact.
I took of half of my position for 175 pips at the 382 retracement of AD and left the other half running with an automatic take profit at the 618 retracement of AD, after moving my SL to a profit protection point. The trade is currently a management of profit and my remaining position ran 215 pips after retracing a bit from a lower point. After reviewing the past week, I spotted a potential follow up trade, using trend lines stemming from this Gartley formation and I defined a new trade candidate for my watch list. For reference I will attach the original chart as posted by me to the chat room and for the purpose of this publication I redrew it slightly to make certain trend lines appear more clearly.
Price has been trading in a 330 pip wide bullish parallel channel for 74 days and tested both the upper and the lower trend lines 4 times respectively. This became evident by expanding the lines going through B-D and A-C. I have decided to change the TP2 of the current, open trade and am now looking to exit as price touches the lower channel line (assuming it will continue down). If it wont go down there is no problem as the market will simply take me out of the trade by hitting the trailing profit protection point. If however it does touch the lower trend line, I will watch for signs of reversal and enter long, essentially buying the low in a bullish channel. Be aware that the Greek situation will keep this pair volatile and Monday Eurogroup meetings are planned.
I have marked two profit targets for the new trade candidate. TP1 = just below a resistance level at 0.7312 and TP2 = where price touches a bearish trend line going through X-D. SL goes outside the channel, 20 pips below a daily support level from 2007 at 0.7116.
There are 285 pips on the line and the trade has a reward – risk ratio of 3.6!
Please like this idea if you think its useful and / or leave a comment below.
UPDATE: The original Gartley reversal (red arrow) finally gave me 305 pips, since -as described in this trade idea- I decided to change TP2 from the 618 retracement of AD (the established method of defining a TP2 in a Gartley) to the point where price would touch the lower channel line. As to the follow up trade (green arrow), I waited for signs of reversal and entered long after the first green candle moved price back above this channel line. Price currently sits 100 pips higher, at 1.4 times the risk, 35 pips removed from TP1.
JRG
⋅
Very nice Gartley...thanks for this. Say, where is the forex chat room located?
I dont often see the currencies reversed in a pair, any particular reason you do that?
antimattero
⋅
I SEE... :) Not really, it is more natural for me, when u from UK... btw I am just observing harmonic patterns in possible new markets{for me}... I'm not trading forex too often, especially this pair.
JazzForex
⋅
Understood, good luck to you sir! I agree with your statement (in your profile) about waiting: patience is key in trading.