14 Dec 11 - GBP/USD - H1 - Bullish Gartley Pattern Type 1 Reversal

With all the technicals in place, it still took a while for the trade to work itself out and since the primary pattern was identified on the H1 chart, it will take a while for the price action to assert itself too.

Breaking the analysis into the various timeframes:

Distal (H4) - Type 1 Reversal

Although the predominant trend looks as though it was a downtrend, zooming out further revealed that there a support at the 0.786 Fibonacci Retracement Level which was supportive of the trade.

Basically, the Distal timeframe provided me with a possible support which was supportive of the long trade.

Primary (H1) - Type 1 Reversal

Following the establishment of the Terminal Price Bar, it required an additional 2 more price bars before the price action stabilized and hinted a possible reversal at hand.

In addition, following the price stabilization, the RSI confirmed the pattern's completion when it rolled out from the oversold region which signaled a possible trade at hand.

Proximate (M15) - Type 1 Reversal

As seen in the attached chart, following the completion of the pattern, there was an impulsive RSI structure which rolled out from the oversold region which served as my confirmation factor.

Following which, there was a downtrend trendline violation and that was my cue to go long on the pair. Admittedly, I would say that I could have entered at a better price but a slight delay on my side cost me a few pips more but nonetheless, the trade was still triggered slightly beyond the PRZ which was still within the limits of the Trade Execution Rules.

Trade Management

The 1st batch was closed when price action violated the Accelerated Trendline, netting a profit of 20.6 pips.

Meanwhile, the 2nd batch has been set to breakeven while aiming for the Target Profit.

The 2nd Batch was closed when the price action violated the 0.382 Trailer and the RSI actually broke the uptrend trendline. In this case, the profit was 6.6 pips.

Proximate (M15) - Type 2 Reversal

A very big lesson learnt for the Type 2 Reversal which I am still not very good at, and a trade which cost me the profits made for the week. A whopping loss of 88.3 pips which I was preparing for the big Bullish Gartley Pattern to play out the Type 2 Reversal.

In this case, the only reason which I figured out in this loss was the lack of confirmation signals on the Proximate timeframe which proved to be an important lesson. In essence, it would be have been a better entry if I had waited for the RSI to give me a confirmation signal.