Here is a case in point. I see some of you trying to SELL now on structure! Ask yourself. Are you selling on structure thinking to gain a few small pips on a rejection? Or are you trying to sell thinking to get in on the main downtrend? What is it doing right now? Is it correcting the main downtrend right now? If so, how long do you expect the correction to last and how far will it correct? You don't have a clue? Then how do you expect to win the trade?
Ok, full disclosure. I AM SHORT on this pair right now since last year! Yes, I have been holding a SHORT trade since Nov. 9th! Almost 2 months now! But currently, my members and I are up almost +400 pips on this trade and I am expecting MUCH MORE to come! So I am NOT against prices resuming the downtrend and falling! I WANT IT TO FALL! But I also know that it isn't going to just keep falling without correcting! Go look at my last post on this pair here:
But anyway, what I am showing you here in my chart is that this is currently in a pullback correction and headed higher probably back into the .73200 level where both a POTENTIAL Bat and a POTENTIAL will have both been filled. This pullback is only PART of the larger wave (3) down so that means that the bigger downtrend is NOT DONE according to wave count and knowing this is only a correction, you should look for a sell BUT NOT RIGHT NOW! Me? I'm holding onto my SHORT position and my members and I will be cashing out hundreds of pips when this downtrend is all said and done!
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If the price comes back to 0.7246 I think that the agressive buyers will come again and push the price higher once more.
Here is my analysis:
Let me explain a little further about what is meant by "conversion". NO PATTERN actually exists here! Conversion DOES NOT MEAN the pattern completing! Harmonic patterns are NOT patterns until the are completed! Here, there is NO cypher pattern in actuality! You are simply trying to justify selling. Yes, I do trade the CD leg of patterns MANY, MANY times but I do that with the FULL knowledge that I'm NOT trading the pattern itself! The highly touted conversion ratio of harmonic patterns ONLY APPLIES to completed patterns. Also, I rarely if ever trade the CD leg of cyphers. I wait for cyphers to complete to trade them.