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Chapter 17, Part III - Gartley's Patterns. Page 14

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Commander in Pips: Ok. There is couple other ways. The first alternative way is to not trade at all, if your stop is too large for your account and to wait:

    1. Try to enter when and if market will reach 1.618 target (that’s has not happened in our example);

    2. Try to enter on retracement when the down move has already started, using some retracement up.

    Pipruit: It sounds not funny, Sir.​

    Commander in Pips: Trading is not funny stuff at all. I tell you – if you have not much money – wait, maybe the market will reach 1.618. This is an excellent strategy.

    Pipruit: And what about the second approach?​

    Commander in Pips: Enter first from 1.272 with harmonic stop 40 pips. If you will be stopped out – you will have to enter again from the 1.618 level. Using such strategy here could give you excellent entry point right at the high, because our Butterfly has been accomplished pips to pips.

    Pipruit: That is much more attractive compared to the first way. Thank you​

    Commander in Pips: Ok, now we have to estimate potential targets. AS with AB=CD it’s a better entry with a lot size that is divisible by 2.

    Suppose we’ve entered with 0.2 lot at 1.4280. Our initial stop loss – 1.618 target + 40 pips = 1.4480 area.

    Our potential targets are: retracement levels of AD move, ultimate targets of Butterfly – 1.272 or 1.618.


    Chart #7 | EUR/USD 4-hour Butterfly “Sell” with potential targets
    [​IMG]

    First profit we should take as sooner as possible to shift trade in risk-free – 0.382 Support of AD swing at 1.4058, making profit ~ 220 pips. This is equal to initial risk. Stop loss on the second half of
     
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