Aiming for the trader's success by creating awareness of the 3M's: Mind, Money & Method by 
Hi folks,
This is with reference to a potential setup on the 4hr chart of the Eur/Usd, which was also commented upon in the previous post.
We are looking at a potential rally to the upside on the Eur/Usd….but right now the downtrend seems to be pretty strong.
Even if one has a potential setup which looks perfect, one must have a look at the overall situation & decide on the trade by taking that into consideration.
Hence we anlayse the situation and follow the "If-Then" procedure.
Which simply means that keep yourself prepared for potential moves (in either direction) and do not enter till price gives the confirmation.
Lets start by looking at the potential bullish harmonic pattern.
Looking at this chart, it seems to be a close call between a "Gartley" and a "Bat".
A Gartley has the retracement of ‘B’ at 61.8 (of XA) and the Bat has the retracement of ‘B’ at 50 or 38.2 (of XA)
Now in this situation at ‘B’, we do not have a close below the 50 level, so we can assume a Bat.
Especially since the ‘D’ level has gone beyond the 78.6 retracement (of XA)
Frankly, this is the point which indicates the underlying momentum is still strong to the downside, and if and only if, price finds support at the 88.6 level, we think about long trades.
If price slices through the 88.6 support level, then we re-analyse our charts.
As I said, lets get prepared for the trade - the "If-then" procedure.
If we do get support at the 88.6 level, then our trade conditions should be based on the fibs as shown in this chart.
I would consider a safe entry on the break of the Fib 23.6 level, as that will indicate the bullish momentum.
The risk-to-reward ratio works out extremely well, as in all the harmonic patterns.
Sunil.
Hi Sunil
Thanks for sharing your strategy for entering trades for a harmonic patterns which are still underway.
Regards
su25