This pair has appeared rather volatile as it enters consolidation. The 5-O movement dictates that there should be a bounce north at 0.74555. As you can see, this falls within pips of the pivot point where price has previously found support resistance! Starting from the top, the points are identified as OXABCD. By buying it at the D point, we are holding the trade until price reaches resistance at the C point. 2:1 risk as always!
in harmonics 5-0 pattern, there is requirement of "Reciprocal AB=CD". what do you think?
KyleMcQuade
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@pipstrading, from my personal experiences, this is not necessarily a requirement- the AB=CD does not have to be included. The main fib levels for the 5-O pattern are:
B: 1.13 - 1.618
C: 1.618 - 2.24
D: 0.50
I have taken many successful 5-O trades; rarely has there been an AB=CD present.
pipstrading
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@KyleMcQuade, ok. i seldom trade 5-0. thanks for sharing. will look more into this pattern.
KyleMcQuade
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@pipstrading, A lot of people will only take a 5-0 trade if there is a valid AB=CD, in much the same way that some will only take a Gartley trade if there is also a valid AB=CD. I have found that this is not a necessity. Good luck! :)