I am enclosing a current scenario on the Daily time frame of Gold.
Please bear with me, if it sounds confusing, as mixing 2 patterns is not easy. But I intend to prove the “Trade management” part….again, and this seems to be a perfect example in the making.
We have seen that Gold respects the Fib ratios quite precisely and hence we can trade some excellent harmonic patterns on it.
Wee are looking at a confluence of 2 different harmonic patterns, which would give us a high probability move.
But once again, we are not here to predict the price movement, but to simply follow it.
Hence we keep our levels fixed and wait for price to confirm, before we enter a trade.
One must remain flexible since the market will seldom move the way we expect it to.

1.) We have a Bullish Gartley pattern in the making (the blue one)
Price seems to have found support on the “C” point of this pattern and if this support holds, then one can expect price to rally to complete the wave C-D…expected price objective  - 980.00 (appr.)
2.) We have a second bearish Gartley pattern within it (the green one)
In this one, price seems to have found support on the “B” point of this pattern and if this support holds, then one can expect price to rally to complete the wave B-C…expected price objective  - 945.00 (appr.)
Conclusion – Looking at the confluence of these 2 patterns, a price rally to 945.00 (appr) is a very high probability trade.
So, my trading bias would be towards a long trade.
One would wait for price to confirm the support at the present level, and only on a confirmation of some bullish momentum, we could think about longs to 944…and maybe 980.
If this support does not hold, then price could continue to the downside….and we are not in a trade. We have only lost the analysis time, but our capital is intact.
Then we look for more opportunities and once again, wait for price to confirm.
Sunil.

Having a disciplined approach to the markets simply means having a precise trading plan and following the plan to the ‘T’.
Now as a trader, one must remain flexible since the market will not always move the way we expect it to. This becomes contradictory & hence turns into a point of confusion.
Being flexible does not mean that one must abandon the discipline, but one must adapt one’s self to the changed situation.
Let’s take an example of an expected harmonic pattern which did not complete, and see how we must remain flexible.
I will go over the unfolding of the situation step by step to make things clearer –

Step.1 – We had a price retracement at the precise 61.8 fib level (B retraced to 61.8 of X-A) which indicated that we have a strong possibility of a bullish Gartley pattern forming.
(Please refer to previous posts for identifying and classifying the different harmonic patterns)
At this stage, this price formation can also be considered as a bullish 1-2-3 pattern.
Step.2 - As traders, we are looking for trades with high probability and we don’t predict the price action. We set down our alternatives and follow price.
Since price found support at a precise fib levels (the 61.8 of ‘X-A’), we can expect a rally to the upside.
Alternative.1 – We can expect an up-move to form the bullish Gartley pattern, and expect price to find resistance at point ‘C’ of the pattern…and give another move down.
We consider the 78.6 Fib retracement level (of A-B) as an important level & so long as price remains below this level, we can expect a down move
Alternative.2 – Price could continue with the uptrend to fulfill the price objectives of the bullish 1-2-3 pattern.
Conclusion – The probability of price rallying to the 78.6 Fib level (of A-B) is very high & one would enter a long trade till this level….at least.

As we can see, price rallied past the 78.6 Fib level (of A-B), which negated the Gartley pattern. Hence one would expect price to continue with the up moves and fulfill the price objectives of the bullish 1-2-3 pattern.

Every different situation demands an appropriate Fib ratio and we always use the Fib Expansions to determine the price objectives of a 1-2-3 pattern.

And price found resistance precisely at the FE 100 level.

Hence one would have managed the trade to get some nice long moves, simply by being flexible as per the situation.
One can call this the “If-Then” approach.
If price does this, then I would do that & if price does that, then I would do this.
But again, this “If-Then” situation has to have precise rules set down, which enable us to manage the trade to its logical conclusion.
Sunil.

Let us have a look at a different pattern, other than the regular harmonic patterns that we follow.
This is a pattern which we trade quite successfully in our trading room and like the harmonic pattern; it is precisely defined, very specific in structure and gives excellent Risk-to-Reward ratios.
The Wolfe wave is a reversal pattern, which forms a 5 point wave structure. It has a very simple 3 step identification process and one can trade within the legs of this pattern…often quite accurately.
I am enclosing an ideal bearish Wolfe wave on the Cad/Jpy.

As we can see, it is very specific in terms of Fibonacci ratios.
1.) Once the points 1, 2 & 3 have been identified, we wait for the point 4 of the pattern to confirm to the conditions.
2.) Once point 4 forms, we can expect price to rally up for a last thrust to point 5, which usually forms at the Fib projection 127.2 / 161.8 (of 3-4)
Thus one can trade this up move with confidence as the price objectives are precisely set.
3.) Once price finds resistance at this fib level, thus completing the last leg of the pattern, we can expect price to change trend to the downside with great momentum.
For the price objective of this down move, we plot a line from the high of point 1 to the low of point 4.
Price will often come down to meet this line which becomes a very precise target.
Sunil.