Analysis of failed trades is very important in trading. That's something a trader must do for every trade to understand why he lost and to learn from his mistakes. Here I will explain why the Gartley failed.
Gartley patterns are used to trade/confirm corrections. They don't work in a trend - price just breaches B, D and goes past X with the trend without pullback to C. It can retrace to B which it did, but then bounced back. Also if C goes past A the pattern is invalidated. You are supposed to have a stop loss above X (11250) where it's safe. Usually the price breaches B, just touches D with a wick (it can happen before or after D) and retraces to 0.5-0.618 CD where you take profit. The price can go past D for a moment but if it stays there, does multiple retests - that is something to be cautious about. You should start looking for exit. Trading corrections is a risky business especially near major S/R levels, so, you should be very careful. Correction is not your friend.
My mistake:
I did not anticipate a move above 11000 past D but when it happened I chose to let the market play it out. Since I had a stop loss at 11400 I had nothing to worry about. It seemed to be a bulletproof level that the bulls didn't have a chance to break - that would require a massive volume pump. So, I waited for dump from the top and when it happened, I stopped monitoring the trade, being confident that the price will surely go down now. However the bulls quickly bought the dips, formed a trading range/triangle and then slammed the price past 11400 with immense pressure triggering my stop loss.
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Yesterday we've been handled by very very experienced, ruthless and cunning bulls. They have shown their true faces yesterday and those faces aren't pretty. Remember that day. Those bulls are always secretly planning smth 1 leg ahead of the market, they set bear traps and lure bears into those traps to squeeze them out of the market. They shoot to kill those bears, skin them alive and rip them out of profit just for fun and only to pump the market a bit further up to catch more bears. They use sophisticated techniques to fool and manipulate the market like covering their tracks in snow, going backwards in their own steps. They mess with the wave count and hide in plain sight. They go: Oh, the bears are waiting for a correction? Ok, go bears, we'll play along. And after the first leg they show their temper. Now they go: To hell with this correction, lets break that level today! Let's do it now!
They are seasoned bulls. They charge on red and want bear blood. They are shapeshifters. They even live in the forest with bears for a few months to prepare. They grow young bears to make them fatter. They look like a bear, they roar like a bear, smell like bear, they even have claws like a bear and pretend to eat fish with bears but there's nothing bearish about them. When the bear hunting season is open they throw away their puffy fluffy sheep masks and start to slaughter bears. If they could they would burn the whole forest with bears and leave no one. Many good old bears, young bears, even teddy bears were slaughtered yesterday with one meticulous deadly blow. Annihilated. Only the strong survived.
Beware those treacherous bulls. If you're a skinny bear, get out of the forest while you can, stay away from the hunting trails. Or you'll never find out what they taste like.
But the Bear Wrath is coming. And these bulls will run and hide and seek shelter in caves where bears will find them.
Gartley patterns are used to trade/confirm corrections. They don't work in a trend - price just breaches B, D and goes past X with the trend without pullback to C. It can retrace to B which it did, but then bounced back. Also if C goes past A the pattern is invalidated. You are supposed to have a stop loss above X (11250) where it's safe. Usually the price breaches B, just touches D with a wick (it can happen before or after D) and retraces to 0.5-0.618 CD where you take profit. The price can go past D for a moment but if it stays there, does multiple retests - that is something to be cautious about. You should start looking for exit. Trading corrections is a risky business especially near major S/R levels, so, you should be very careful. Correction is not your friend.
My mistake:
I did not anticipate a move above 11000 past D but when it happened I chose to let the market play it out. Since I had a stop loss at 11400 I had nothing to worry about. It seemed to be a bulletproof level that the bulls didn't have a chance to break - that would require a massive volume pump. So, I waited for dump from the top and when it happened, I stopped monitoring the trade, being confident that the price will surely go down now. However the bulls quickly bought the dips, formed a trading range/triangle and then slammed the price past 11400 with immense pressure triggering my stop loss.
_________________________________________________________________
Yesterday we've been handled by very very experienced, ruthless and cunning bulls. They have shown their true faces yesterday and those faces aren't pretty. Remember that day. Those bulls are always secretly planning smth 1 leg ahead of the market, they set bear traps and lure bears into those traps to squeeze them out of the market. They shoot to kill those bears, skin them alive and rip them out of profit just for fun and only to pump the market a bit further up to catch more bears. They use sophisticated techniques to fool and manipulate the market like covering their tracks in snow, going backwards in their own steps. They mess with the wave count and hide in plain sight. They go: Oh, the bears are waiting for a correction? Ok, go bears, we'll play along. And after the first leg they show their temper. Now they go: To hell with this correction, lets break that level today! Let's do it now!
They are seasoned bulls. They charge on red and want bear blood. They are shapeshifters. They even live in the forest with bears for a few months to prepare. They grow young bears to make them fatter. They look like a bear, they roar like a bear, smell like bear, they even have claws like a bear and pretend to eat fish with bears but there's nothing bearish about them. When the bear hunting season is open they throw away their puffy fluffy sheep masks and start to slaughter bears. If they could they would burn the whole forest with bears and leave no one. Many good old bears, young bears, even teddy bears were slaughtered yesterday with one meticulous deadly blow. Annihilated. Only the strong survived.
Beware those treacherous bulls. If you're a skinny bear, get out of the forest while you can, stay away from the hunting trails. Or you'll never find out what they taste like.
But the Bear Wrath is coming. And these bulls will run and hide and seek shelter in caves where bears will find them.