Aiming for the trader's success by creating awareness of the 3M's: Mind, Money & Method by 
This is with reference to a question, on how to calculate the price objectives of the “Butterfly” pattern. Following up from the previous post
http://blogs.fxstreet.com/forexology/2009/02/08/a-harmonic-pattern-at-the-time-of-nfp-data/
we can see that price movement has gone in the anticipated direction…so far.
The harmonic patterns have very specific price objectives, but as a trader one must manage the trade to lock in profits at every step.
Hence we maintain the correct technical levels leading to the ultimate price objective…just in case price decides to go against us.
The following chart shows the 3 price objectives, calculated from the reversal level “D”. These should be used to manage the trade efficiently.
Target.1 - The measured move distance of wave “B-C”.
(This has been clearly explained in the previous post http://blogs.fxstreet.com/forexology/2009/02/08/technical-analysis-is-a-path-to-enable-us-to-reach-our-goal/ )
Target.2 - The fib projection 78.6 of wave “A-D”
Target.2 - The fib projection 127.2 / 161.8 of wave “A-D”…which is the ultimate target of a harmonic pattern.
Once again, one can never be completely sure of achieving all the targets. As traders, we are here to make money & I would keep taking profits when the market gives it….and yet remain in the trade for further moves.
After all, that is what trade management is all about.
Sunil.
I have been following this pattern as well. Let us hope it continues!
Do you think PA on last Friday altered your view on USD/JPY?
Is bullish break above 92,30 inevitable?
Regards,
G.
Sunil,
Thank You a lot for explanation!