EurGbp Weekly Chart Pattern and Trade

Note: This is just another way to look at similar information that has been presented previously. Pattern trading is another piece of the puzzle and sometimes it is cool how different methodologies come together. Trying to keep it simple I am looking for pre-set targets and the pitchfork not only brackets price but gives those targets. Lets see what we have.

The Purple Gartley As you see the consolidation pattern in green from May to August, the summer months and then a poke out of Consolidation in September. Price just fell back into the previous consolidation pattern. This is seen as the long green rectangle. In October an expanding pivot took shape, (expanding pivots are very dangerous to trade) only to exhaust, test the consolidation low and move into what I would call an “x” to “a” leg - of a soon to be bearish Gartley. (Purple) January sees the pair move short in an a to b leg terminating at almost the.50 fib level, then turning around to form a b to c leg which reaches its top the later part of January. The “c” to “d” leg drops to a.55 level of the original “x” to “a” leg. Price again reverses in February long in a “d” to “e” leg breaking a wedge and terminating just above the.382 of the original x to a leg in March The purple Gartley is seen on the chart in the next slide.

Consolidation and the Purple Gartley

The New “Gartley” Price now starts at “x” (“e”) and moves down to “a” to create a bottom the end of June Price moves into an “a” to “b” by the end of June “B” finds a high by the middle of July and then price falls to a higher low as compared to “a” in a “c” leg. “C” turns into a “c” to “d” leg. Price moved up into a wedge and s subsequent vertical move up. (See the blue Gartley as represented on the following chart.)

The New Gartley

Note: Simply finding price at a high means nothing if we cannot define the level either by a line of Support or Resistance. The idea for this trader is to box in price and have price test a line whether it be horizontal or sloping. Price will give a clue as to its direction. Lets place a pitchfork on the chart and get some kind of reference. The red arrows show the test of lines as potential entries for a trade long. Note how price tested the lower median line parallel x 2 and then price moves up into a wedge to collect energy and then test the support at.8719 and move up in an almost 90 degree blast to the top where price intercepts the median line. The circle at the median line represents price there 80% of the time. Testing the median line as well as the support and resistance lines are key for a continued move long (or short.) The trade is played out on smaller time frames.

The “Fork”

Note: At present I am short from the.9170 level after being tested. I was able to enter the short early off the Upper Median Line Testing short will find my target at Of course any short move might be the genesis of a “d” to “e” leg of this Gartley. Should price back up and take me out I will look for a long opportunity at that same level of The test of this line (.9170) is key. The line was tested and another entry was placed and the stop of the original move was placed at the stop of the second entry at the horizontal resistance line. The chart shows a series of red- white lines representing pivot lows to beat at each step to continue short. My stop as usual is very small and at this time.5 of the trade is stress free. Lets see how the trade plays out. Note how the pitchfork fits with the Gartley and reflects the targets.

The Trading Chart

Update The DE leg of the Gartley was to say the least short lived. Price closed the short on Divergence. After the fact we see hidden Divergence which was a clear signal for price to rise. This traders soonest opportunity to get back in the action was the following morning around 1100 mst. I trailed the stop on price structure. I was hoping to make the median line but was stopped out below the price structure. An early morning entry with s small stop saw the trade go into the early morning while I retired only to awake and trail my stop below structure. Eventually the stop was taken out. Price did make it to the median line and perhaps I should have removed the trade there. I retendered the trade again at.9250 and took it above my target at.9270 and the stop has been moved from.9245 to.9260 where it will sit while I wait to see how the trade fairs in the am. I followed this trade on a 377 Tick chart as my signals were superb. Also, note the weekly chart that at this time has an inside bar and has not affected the structure of the Gartley.

377 Tick Chart

Weekly Inside Bar