31 Aug 12 - GBP/JPY - H1 - Bullish Shark Pattern - Type 1 Reversal

Finally back from a break and I was relaxing for the week when I saw this classic textbook setup which was too beautiful to skip.

From my experience, once the RSI completes its structure prior to a pattern completion, it will usually give rise to a very nice setup in the proximate timeframe and it is evident in this case.

Primary - H1

In the primary timeframe, there was an exact 1.13 XAB component which sets up the expectation of a Bullish Shark Pattern. In this case, what makes this setup idea was that the RSI was early in validating the pattern prior to its completion and in addition to it, the RSI was showing signs of strength as the price action moved down to complete the pattern.

I would consider this setup to be quite strong as there was a simple RSI confirmation seen within the whole pattern setup.


Distal - H4

Referring to a timeframe up, it can be seen that the pair was trending up and it happened to be at the lower constraint of a channel and thus my bias in this case would have been a long trade.

Proximate - M15

The trade was triggered at 123.835 when the RSI completed the RSI BAMM Confirmation setup with a predetermined target at 124.250, which is near the 0.50 BC projection since the natural expectation that a Bearish 5-0 Pattern may result as Shark Patterns are precursors to 5-0 Pattern.

Trade Management

The 1st batch of the trade was closed at 124.157 when the price action traded up to the 0.382 BC projection, netting a profit of 32.2 pips and the trade was set to break even thereafter.

The 2nd batch was closed when the target objective was hit at 124.250. Profit was 41.5 pips and the whole position was squared off. I did not move the TP up in this case as it was already a Friday and I wanted to have a nice trade for the week and this wraps up my trading week.


Reflection

After taking a short trip, it was refreshing to come back and trade again though. Nonetheless, I am trading lesser these days as I only look to trigger on the more ideal setups and stay on the sidelines when setups do not fulfill my criteria. Although it is said that I am trading lesser, I have never slacked in any way as I am still monitoring the charts everyday and only trigger when the conditions are right.

I have realized that to be successful at trading, I will not need to trade everyday and trade only when the opportunity presents itself, meaning that I can also sit and wait for a week or more without trading when the conditions are not right for me.

Wishing all a great month for Sep!