My Technical Mindmap for Euro
Updated
This mind-map is based on the assumption that we are in corrective wave 2. Breaking it down further, I think that we are currently in final 5th wave of the C wave.Translating this, we can go to minimum 1.08+ before moving down. I am currently long fro m 1.071 (current market price is 1.0715) with stop at 1.0678 and targets 1.080-10850 & 1.09-1.0940. If we reach these zones< i would be looking for a reversal down to the 0.88-0.618 retracement of this whole move from Sunday/Monday low of 1.0503. Assuming it plays out as expected and we move back to this 0.88-0.618 zone (which may be 1.0580-1.0650), we can do two things :
1 Longs(my preferred view at the moment as risk reward could be quite good beacuse we know where we would be wrong) This long is based on the idea that we may be repeating the corrective move for a higher degree fractal of already completed lower degree corrective wave. : i. take a long straight away with stop immediately below this week's lows plus spread ii. wait for bullish signals/signs on daily chart before going long.
2. expect this week's lows to be taken out and then look for shorts. This can be the "Big" shorts but will be quite difficult to trade with good risk/reward ratios. We will be entering price zone not tested for years and technical levels to lean on define risk for trades will be difficult to identify .
Next stage: The "Big" short
In case we get successful longs as mentioned in scenario 1 above, our target(s) would be above the previous corrective highs. I will be trying to keep an eye on the wave structure to identify completion of the corrective move and look start looking for the "Big" short. In this case our risk is clearly defined at the Trump day high. If we breach that then we need to reassess the whole structure. I would personally like to get my entry as close as possible to my stop level for highest possible trade size and hence the risk-reward. In case we reach up, the 78.6 to 88 fib zone will be of special interest to me and I will be risking around 5R on this trade. ( i would love this mind map to play so that I have already earned what I want to risk on this trade)
1 Longs(my preferred view at the moment as risk reward could be quite good beacuse we know where we would be wrong) This long is based on the idea that we may be repeating the corrective move for a higher degree fractal of already completed lower degree corrective wave. : i. take a long straight away with stop immediately below this week's lows plus spread ii. wait for bullish signals/signs on daily chart before going long.
2. expect this week's lows to be taken out and then look for shorts. This can be the "Big" shorts but will be quite difficult to trade with good risk/reward ratios. We will be entering price zone not tested for years and technical levels to lean on define risk for trades will be difficult to identify .
Next stage: The "Big" short
In case we get successful longs as mentioned in scenario 1 above, our target(s) would be above the previous corrective highs. I will be trying to keep an eye on the wave structure to identify completion of the corrective move and look start looking for the "Big" short. In this case our risk is clearly defined at the Trump day high. If we breach that then we need to reassess the whole structure. I would personally like to get my entry as close as possible to my stop level for highest possible trade size and hence the risk-reward. In case we reach up, the 78.6 to 88 fib zone will be of special interest to me and I will be risking around 5R on this trade. ( i would love this mind map to play so that I have already earned what I want to risk on this trade)
Note
the long trade from 1.0710 closed at 1.0765 for now, will reassess if we get a pull backNote
taking a long again at 1.0739 if we get there with tight stop and targets at 1.0820 mainly and 1.09 for smaller portion of the position. This choppy price action just helps to add to the confusion regarding the wave structure.Note
This buy has been cancelled as we crossed yesterday's highs which were also a micro structure highs. Now will look for selling opportunities above 1.08+ and will try to determine the characteristics of the down-move when it happens which may give us clues that it is impulsive (eg 5 wave structure) or corrective (eg ABC or 3 wave structure). Any longs as mentioned in point #1 in the main idea should only be taken if we are confident that the down-move is corrective.
Note
This move seems impulsive on the face of it and a break below recent lows would confirm a lot of things. A last punt buy could be the 0.88 fib with 1R risk just below the lows but there is nothing to suggest till now that this move is corrective so not buying down here instead the current impulsive look of this move suggests we should look for sells...on the sidelines and watching keenlyNote
Anybody interested in a long can look look for the 1.0545-85 zone with a stop at 1.05.Note
This would be risky long but if the wave structure is fractal and part of overall corrective structure, then the risk-reward is well worth it. In case we break below 1.0499 then the "Big" short might have just begun
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