Potential Crab Pattern forming on Daily chart. The 161.8% extension of D point completion comes in the January 2014 resistance zone, which gives us a bit more conformation. We might also look for the market to be overbought near the D point completion. Since it's a daily chart stops can either be 10 to 20 pips above the resistance zone OR if you are trading with micro lots, then stops can be 10 to 20 pips above 200% extension level of XA leg.
Trade setup:
1. Choose position size lot based on your preference
2. Short at 161.8% extension of XA leg (D point completion)
3. 1st target is 38.2% retracement of AD leg
4. 2nd target is 61.8% retracement of AD leg
5. Once 1st target achieved, move stops to break even
Trade Safe and Good Luck to all !!
Trade setup:
1. Choose position size lot based on your preference
2. Short at 161.8% extension of XA leg (D point completion)
3. 1st target is 38.2% retracement of AD leg
4. 2nd target is 61.8% retracement of AD leg
5. Once 1st target achieved, move stops to break even
Trade Safe and Good Luck to all !!