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2618 Trade

GBPAUD: 2618 trade setup 4 hrHello Traders, So here we got a completion of 2618 trade setup on 4 hr. The overall trend of this pair is BULLISH but we are reaching a strong trend line (Blue) up ahead and our stop is above the double top and the trend line, thus giving the trade more room to breath. Both of the targets come at previous lower highs, making it a reasonable place to take profits off at. The RSI also touch the overbought level and seems to be returning back down, at least for now. See the chart for more details. Thank you for your time. Trade smart and Good Luck!!
Short
by moneymaking
2
EURUSD: Trading a la CarteThe Euro obviously is a weak currency though it rallied a couple of times the last month for no real fundamental reason . It seems it seized the opportunity to capitalise on the recent uncertainty surrounding the USD after the last FOMC statement left the market confused on its direction and after the poor NFP numbers that came out last week. Traders have been selling the dollar the last few weeks, quick to discount the chance of an early rate hike. The FOMC minutes of last Wednesday however showed that some FED members are still very much in favour of a June hike, which immediately re-strengthened the dollar. So, with much of the uncertainty surrounding the dollar now gone, we can clearly say the fundamental direction for this pair is bearish. On the technical side, there is a lot going on with the 4H timeframe and there are several trading opportunities to be found. I have charted them and will describe them here, but to avoid cluttering up the chart I have refrained from plotting trade entries, exits and stop losses. It would have made the chart messy. We have a bullish Bat pattern where the price is approaching the potential reversal zone (PRZ). Trading the CD leg of a bat pattern towards its completion is called the BAMM strategy and is a legitimate trade setup in itself. Those who are already short on this pair, could remain short until PA has tested the full PRZ and starts showing signs of reversal. This means that from the current price there is between 70 – 115 pips more downside before a significant retracement. I do not advise anyone who is not already short to enter short now (the break of the B point would have been a good entry), but if your plan and method tell you that you can, by all means go ahead. The A and C point of the Bat pattern happen to form another price pattern called a double top . A double top is a double top if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA rallied and tried to make a higher high after the bad NFP data, but failed. This reversal pattern might not have played itself out completely yet, even though after failing to print a higher high, the price already dropped significantly and broke the neckline. We are looking for a retracement to happen soon (which is likely given the oversold state of the RSI ), which might coincide with the reversal of the Bat pattern. This retracement could end either at the neckline (which might act as resistance) and where there is a nice confluence with the 382 retracement of AD or –in case its strong, which is less likely- at the 618 retracement of AD. Trading this retracement is only for harmonic / countertrend traders who know what they are doing, since the overall trend is bearish. After the retracement I would have an ideal place to go short on this pair to profit from the bearish trend (either at the neckline or 618 retracement of AD, depending on where price might reverse again). I would then remain short until the 1272 extension of the prior leg down, maybe even until 1.0273 (key daily support level) depending on PA. To be clear, I am not predicting any of this will happen , but if it does, I hope to have provided several valid trade ideas (both with and countertrend) and areas where to enter those trades and where to exit. These are on my watch list. Call it trading à la carte. My advise to anyone looking to take one of these trades would be to consult your own trading plan and apply the rules of entry, exit and risk management you normally use and are comfortable with. Good luck and may the pips be with you! NB For some reason the support line at 1.0273 is not showing in the chart (I did chart it!), apologies for that.
by JazzForex
38
EURAUD: Reviewing The Tape (Education not a trade idea)I've already written my "Trading Recap" blog post for today but I wanted to share something with you guys. For you guys that have been following along with my blog you know that I've been working on an article looking at professional athletes and professional traders. One of my main comparisons is the amount of preparation and review that both do. Just like Peyton Manning or Tom Brady do after every game, after each trading day I review the tape, meaning that I go back through my trading day and critique myself. After all, in this industry we are our own bosses so if we don't do it who will? Last night I posted a trade looking for a potential breakout to the upside on EURAUD, although we did test the highs of our previous structure level we never got the break that I was looking for and it ended up being a scratch trade (breakeven). This morning in our Warroom meeting Jason Stapleton fired off 2618 idea for this same pair. (I'll attach a link to the FREE 2618 training at the bottom of this post). In the live room we ended up finding a bearish Cypher at the same level and ended up getting short as well. After banking some good pips, I spend the rest of our session going through the rest of my portfolio and basically but this pair on the back burner. BIG MISTAKE, if only i would have paid more attention to it, i would have seen that IF our 2618 setup were to rally to 2nd targets THEN we'd also have a Bat pattern completion which we plant a stop & reverse at. So yeah I left a few pips on the board today but the important part is that I was able to identify my mistake and turn it into a learning experience. For those who don't take the time to review their day, well that mistake may continue to be a future mistake. Thanks for taking the time to read this and I'll see you next week at the Technical Trader Workshop!!! FREE 2618 Training Lesson: www.youtube.com 2015 FREE Technical Trader Workshop: promos.tradeempowered.com
Education
by Akil_Stokes
10
#USDJPY doubletop,bearish diverge - W,Cyphers for long/short - DSomething to watch for: #USDJPY doubletop,bearish diverge - W,Cyphers for long/short - D @TradeYodha (TradeYodha.com) 1. USDJPY is showing a double top bearish divergence on weekly 2. Daily showing signs of head and shoulders 3. There can be a bullish cypher too on daily 4. there is a bearish cypher on H4/Daily right there in the zone at the top where we have weekly confirmation too. I would love to hear your opinion, feel free to agree or disagree in your comments. Please give it a (thumsup) if it makes any sense.
by TradeYodha
1
USDCAD: Bullish 2618 SetupCurrent Sentiment: Bullish Price managed to put in a double bottom divergence setup last week. For now, we will wait for a potential 2618 setup to enter based on a trend continuation trade next week. I would love to hear your opinion, feel free to comment, agree or disagree. ------------------------------------------------------------------------------------------------------------------------------------------------------------------ Always wanted to connect, learn and help one another throughout your trading journey? Join our community for FREE at www.facebook.com The only thing you need to 'pay' is your commitment to trading and sharing! Have a great pipping day! www.fxpipsology.com www.facebook.com Cheers, KY
Long
by KarYong
EURJPY: Bearish Bat Pattern Into 2618/Kiss of Death TradeJust broke this pair down in my Live Trading Room. After looking at the LLLC of the triple top highs, our traders were gearing up for a potential 2618/Kiss of Death trading opportunity. As we dug a little deeper into things we noticed that if we got the retracement back into previous structure then that 2618/KOD would be bet with a bearish bat which could be used as an entry reason. If price action goes the opposite direction (or retraces and then makes a bearish dive) we also have 2 more advanced pattern waiting for us lower. A bullish Cypher and Bat pattern
Short
by Akil_Stokes
3
2618 running into a Gartley pattern? EURJPYI noticed the gartley pattern first. As you can see the deep AB leg caused a big reversal zone. I would wait for a better entry reason, but it all depends on your risk/ratio-liking. I also noticed the double top w/RSI divergence at the C leg that's setting up a possible 2618 trade. You could ride the train down to the D completion point, but I would atleast take half of my position of at 129.106-ish, considering the strong resistance it has shown. Any feedback is appreciated!
by MaynardTheMenace
A temporary relief of bear pressure?An initial test of the 0.7091 - 0.6535 range has taken place. This test could mean a temporary relief of the downward pressure. Now with this in mind i see a few opportunities to trade this pair. The first one is a so called 2618 setup. For those aggresive C to D pattern traders, the 0.618 retracement at 0.7073 could be a turning point to go long. The second one is a bearish bat pattern which completes at 0.7267. From a risk to reward point of view this setup couldn't be better. Also, there is still a lot of room to cover to the downside.
Long
by Mikoxl.
GBPJPY: 200 Pips for a 2618 Play with RSI DivergenceIn general, I am expecting a continuation of GBP strength the coming week, drawing support from steady economic growth with the revised GDP coming out as expected and recent labour market data coming our positive. The Japanese Yen on the other hand is under pressure with the BoJ revising their growth forecast lower and most of the recent Japanese data disappointing the markets. This pair has been on a strong bullish run since the beginning of February, gaining 900 pips and it currently sits around the 618 retracement of the swing low that started December last year, creating a zone of resistance. The recent uptrend is starting to lose momentum with price action on the daily trading sideways for the last few days and failing to print a higher high on the 4H after the last outside return, showing a clear bearish divergence condition on the RSI. Could it be a top has been formed, at least for now? Its possible, because we may have a double top pattern developing on the 4H timeframe. It is not certain the pattern will complete, but I put this trade candidate on my watch list just in case. We have plenty of Japanese and UK data coming out on Monday that will give an impulse to this pair. I am describing the most conservative play here (known as the 2618 trade), with the most conformation possible. The scenario is depended on a number of steps happening before entering the trade and as such its a true “if… then… scenario”. A double top is a double top if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA tried to make a higher high, but failed. This retest of resistance with less strength also follows from the regular bearish RSI divergence at the second top. We need the following steps to occur before entering a trade: (1) price breaks below and closes below the neckline, (2) price retraces back up, until 618 retracement of the prior leg down and (3) price stalls, stops and reverses at this retracement level. In that case, SL goes above the highest high of the tops. TP1 = structure level where the retracement started, TP2 = 1272 extension of prior leg down. In terms of trade management, when TP1 is hit I would take profit on 1 position and roll my stop loss to breakeven, enjoying a risk free trade hunting for TP2. There are 200 pips to be made (if this pair follows all the steps in the script) and the trade has a reward – risk ratio of 2.2! UPDATE 1: Price broke below and closed below the neckline. UPDATE 2: We had a double top, a reversal happened and price broke the neckline dropping a total of 262 pips on the first leg down from the second top. However, my conservative entry technique kept me from profiting of this first leg down, since I need a retracement before entering. I found an alterative entry and went short, after PA finally made a 500 retracement that converged with the neckline area. I made 132 pips on the second leg down.
Short
by JazzForex
24
AUDUSD: Potential 2618 Play on the Aussie DollarThe less dovish than expected tone from the RBA last week, stating the exchange rate was still overvalued but failing to give any mention of a time scale for further rate cuts, made me less bearish than I was on this pair. On top of that, the FOMC minutes highlighted concerns about hiking interest rates too soon, creating some buying pressure. Last week was therefore a net gainer and all in all I would say that for now, the steep downtrend has started to fatigue; with the last five months seeing it lose a staggering 1.580 pips. This does not mean I have gone bullish on the Aussie Dollar, far from it. Price is currently sitting at a level (784-ish) where all buying interest has ebbed away for the last two weeks straight and the latest attempt to break it failed again last Friday. As a result, we may now have a basic reversal price pattern developing on the 30M timeframe: a double top. This trade idea is about the possibility of trading that pattern. I am describing the most conservative play here (known as the 2618 trade), with the most conformation possible. The scenario is depended on a number of steps happening before entering the trade and as such its a true “if… then… scenario”. A double top is a double top if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA tried to make a higher high, but failed. This retest of resistance with less strength also follows from the regular bearish RSI divergence at the second top. We need the following steps to occur before entering a trade: (1) price breaks below and closes below the neckline, (2) price retraces back up, until 618 retracement of the prior leg down and (3) price stalls, stops and reverses at this retracement level. In that case, SL goes behind swings high of the tops. TP1 = structure level where the retracement started, TP2 = 1272 extension of prior leg down. In terms of trade management, when TP1 is hit I would take profit on 1 position and roll my stop loss to breakeven, enjoying a risk free trade hunting for TP2. There are 42 pips to be made (if this pair follows all the steps in the script) and the trade has a reward – risk ratio of 2.0! UPDATE: There is good news and bad news on this one. The good news: most of the analysis was correct. We did have a double top, a reversal did happen and price did break the neckline and hit both profit targets. The bad news: my conservative entry technique kept me from profiting of the first leg down, since the drop happened too fast to enter and there was no retracement before the profit targets were hit. I did go short, after PA finally made a 500 retracement that aligned perfectly with the neckline (that served as resistance) and made 49 pips on the second leg down (which was a 1272 extension of the prior leg down). Since then we had a third leg down, which I did not trade. I left some money on the table, but the trade was profitable.
Short
by JazzForex
27
EURUSD: Reversal Play With a Double Top ScenarioThis pair fell sharply on Friday on the back of a strong US jobs report with a higher than expected non-farm payroll number (257K) and a favourable wage gain percentage (0.5%). Because of this strength in the US labour market, the USD immediately became bullish, creating enough selling pressure to make this pair lose 145 pips. The diverging economies as well as diverging monetary policies by the FED and ECB keep me overall bearish on this pair. On the technical side, we now have a basic reversal price pattern called a double top on the hourly. I know 4 different ways to trade a double top, but I am describing the most conservative scenario here, with the most conformation possible. It is depended on a number of steps happening before entering the trade and as such its a true “if… then… scenario”. A double top is a double top if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA tried to make a higher high, but failed. This retest of resistance with less strength also follows from the regular bearish RSI divergence at the second top. In the conservative scenario (also known as the 2618 trade) we need the following steps to occur before entering a trade: (1) price breaks below and closes below the neckline, (2) price retraces back up, until 618 retracement of the prior leg down and (3) price stalls, stops and reverses at this retracement level. In that case, SL goes behind resistance above the tops. TP1 = structure level where the retracement started, TP2 = 1272 extension of prior leg down. In terms of trade management, when TP1 is hit I would take profit on 1 position and roll my stop loss to breakeven, enjoying a risk free trade hunting for TP2. There are 208 pips to be made (if this pair follows all the steps in the script) and the trade has a reward – risk ratio of 2.2! UPDATE: Price followed the script; but it took its time to do so. It broke below the neckline, eventually reaching the level indicated by the first red arrow. After a bit of stalling it rallied up to the 618 retracement of the previous leg down (as predicted), where it ranged around that retracement zone for 10 days. Then it dropped a bit and ranged around the 318 retracement zone for 3 days before finally caving as it hit both profit targets last week.
Short
by JazzForex
11
GBPUSD - a textbook example of a 2618 tradeSince some people do not know what a 2618 trade is, and the opportunity is there, I thought I'd make an example for educational purposes. A 2618 trade is probably the safest way to trade a double top or double bottom and although the Risk/Reward ratio is a little less favorable, my preferred way to enter a double top/bottom trade. Basically, you wait for the downward trend, away from the double top (the upward for double bottom) to break and close below the neck line of the double top/bottom. Then, if a retracement occurs, you put a limit order at the .618 retracement of the previous leg of the move, in the direction of the previous move. You might miss a couple of double top/bottom trades if no retracement occurs, but percentagewise you'll win a lot more of these trades. Hope this was informative to you, don't forget to hit the like button :)
Education
by Nico.Muselle
12
GBPUSD: Part 2 The 2618This morning I posted a trade idea titled "3rd Times The Charm" In this idea I mentioned that i had previously taken 2 losers on this particular currency pair the day before and was ready to reload once again for another shot at getting short. Well that trade payed off as our double bottom/ Bat pattern (LTF) rolled over without much pain this morning and then even more so after this afternoons fundamental action. For those of you who took the trade congrats. For those who didn't the next opportunity to get short will come in the form of a 2618 setup. Here's a link to a FREE training that we did on the 2618 if you want to learn the strategy. www.youtube.com But essentially what we're looking for is the break and close below the initial double bottom (signifying a rotation in trend) followed by an outside return into the 61.8 or structure. typically targets are taken at the retest of the latest impulse leg and some sort of extension whether it be the 1.272, 1.618, ac=cb or just future structure.
Short
by Akil_Stokes
6
GBPAUD: SHORT?? Is This Guy Crazy?What fun would trading be if we didn't stem up a bit a controversy every once in a while. Now when looking at the higher timeframes everyone is calling for a long on the GBPAUD based on the previous level of structure that we're coming into. Me...well I took a short position this morning at the 86 even handle. Seeing how more than 80% of traders fail I have no problem going against the grain especially with I can back it up with a valid case for entry. Although my initial trade was on the hourly timeframe, the chart before you is of the 15min because within the move that we've seen today, the market is offering traders of the 15 minute timeframe a second chance to get involved in the form of a 2618 setup. Back to the initial though process of getting short, In this mornings Training session, I did a lesson on the different type of divergences. Regular vs. Hidden. While showing them an example on the GBPAUD I actually stumbled upon a trade that looked like a great opportunity. So I took it. (For those of you in The Syndicate program Jason broke down this trade in WARROOM as welI.) What I saw was a standard trend continuation trade with the RSI being overbought and the presence of hidden divergence on the hourly timeframe. What I see on the 4 hour and daily charts doesn't scare me much as we've pushed past what I would have considered the reversal zone IF that structure level was going to hold. The test and hold of the 1.8400 level (w/rsi OS) is something I'm aware of, but my I don't need a push beyond that level to secure profits. With a risk/reward ratio of over 1:3 this was a no brainer hence my aggressive entry this morning. I know I'm going to hear from you guys and I don't mind having the debate, all I ask is let's be professional and be open to the fact that in any market there has to be buyers and sellers at the same price level. Sometime's I'll be right, sometimes you'll be right. As long as we're all making money at the end then it's all good. So know strategy bashing please for you trolls out there.
Short
by Akil_Stokes
31