Hello Traders,
Here we have a BEARISH HARMONIC CRAB PATTERN on
USDJPY
, that has been completed. We also have a POSSIBLE RSI bearish divergence and the reason I call it a possible RSI divergence is because I DO NOT take divergences seriously unless they are proven by the market. What I mean by that is, ONLY when the market starts to break structure in the DIRECTION of the divergence, then do I take divergences into account. Therefore, the current divergence that we are seeing right now could be proven wrong by the market. We also have a decent risk to reward ratio for this setup and for crab patterns the stop loss is placed 10 to 20 pips above (for short trades) the 200% Fib extension level for XA leg. See the chart above for more details.
I would also like to point out that, for placing the stop loss I DID NOT took structure into account because if I had done that than, the risk to reward would have been quite unfavourable for us to take the trade. Thus for this particular setup, I have just followed my rules on HARMONIC CRAB PATTERN in determining the correct stop loss placement.
NOTE #1: The pattern has been completed BUT the trade is NOT ACTIVE YET !!
Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Good Luck :)
Here we have a BEARISH HARMONIC CRAB PATTERN on
USDJPY
, that has been completed. We also have a POSSIBLE RSI bearish divergence and the reason I call it a possible RSI divergence is because I DO NOT take divergences seriously unless they are proven by the market. What I mean by that is, ONLY when the market starts to break structure in the DIRECTION of the divergence, then do I take divergences into account. Therefore, the current divergence that we are seeing right now could be proven wrong by the market. We also have a decent risk to reward ratio for this setup and for crab patterns the stop loss is placed 10 to 20 pips above (for short trades) the 200% Fib extension level for XA leg. See the chart above for more details. I would also like to point out that, for placing the stop loss I DID NOT took structure into account because if I had done that than, the risk to reward would have been quite unfavourable for us to take the trade. Thus for this particular setup, I have just followed my rules on HARMONIC CRAB PATTERN in determining the correct stop loss placement.
NOTE #1: The pattern has been completed BUT the trade is NOT ACTIVE YET !!
Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Good Luck :)