EUR/USD – Bearish Bat Blow-out with Failed Wave

27 Jul

Bearish Bat Blow-out with Failed Wave

EUR/USDStarted the trade with a short position gaining 1.7 pips. Then disaster struck when exploratory buys go wrong. I was expecting a bullish 5-0 to occur but that pattern got blew-out when the 50.0% retracement was breached. Decided to average down when I noticed my oscillators were already in the oversold levels. Went all-in at the last two arrows in the left. Thankfully, a potential bearish bat set-up. Also, the BC leg of the structure is a very text book example of basic Elliot Wave (wave 2 retraced 61.8% and wave 4 retraced 38.2%, the rule of alternation). The plan was to sell at the 88.6% retracement so I sold everything with 6.7 pips, only to find out the pattern was blown but a failed wave (113% extension) occurred.

Anyway, had other non-harmonic trades tonight but this one is my favorite set-up. Made me realize too that the “tuition fee” for FX is greater than equities. Glad to have dodged the bullet on this trade. Still an FX trader-in-training (and a future insomniac?) and going through the learning curve.

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Posted by on July 27, 2011 in EUR/USD, FOREX


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