Should I be afraid of “Sharks” in forex?

Should I be afraid of “Sharks” in forex?

We study the popular forex pattern of harmonious trading

There is an opinion among traders that finding an entry point to a position is easier than leaving it. The market is ruled by Greed and Fear. In a consolidation environment, the use of the Greed-based “buy and hold” principle often leads to losses. On the contrary, in the trending market, Fear and premature closing of a long or short make you bite your elbows. If I hadn’t come out, I would have been in chocolate! Thus, for the correct identification of exit points, it is necessary to understand what stage the market is at. The application of the principles of harmonious trade will not be out of place.

Harmonious Forex trading refers to the direction of technical analysis, which allows using the combination of patterns and Fibonacci ratios to identify the most likely areas of reversal. This trading system is based on the assumption that the market, like life itself, seeks harmony. If so, then you can try to determine the levels from which the quotes of a particular instrument will end. Almost all the models studied in the framework of this educational blog are components of harmonious trading, so it will be enough for a reader familiar with them to simply apply Fibonacci ratios identified experimentally and take the first step in the direction of this technical analysis technique. For example, the basis of the harmonious Shark pattern is the Anti-Turtles model, well known to us from previous posts.

We are talking about two consecutively growing peaks in the bull market or two falling lows in the bear market. An important feature that can be regarded as a filter is the excess of point B (in relation to Anti-Turtles – point 3) of point X (1) by 13% -61.8%. If this condition is met, welcome to visit the Shark pattern! Its targets are located at 88.6% and 113% of the 0-B wave. It is near these marks that a reversal is likely.

Try to build it yourself on the AUD / CAD price chart using the features in the LiteForex cabinet, which in my opinion has the best graphical analysis platform built-in.

Harmonious trading models are used in two main areas: to search for entry points (classic approach) and to identify moments of closing previously opened positions. For example, in the case of GBP / JPY, the Anti-Turtles pattern was implemented according to the 2B Base / Peak strategy of Viktor Sperandeo with a target at 113% of the XC wave.

The location of the targets at 88.6% and 113% is called the area of ​​convergence or reversal . In the presence of confirming signals, whether indicators, signals from price action or any other methods of technical analysis, you can think about a reverse transaction. So, in the case of GBP / JPY, the emergence of the Anti-Turtles counter-trend trading model in the area of ​​convergence is a good reason for forming a short pound position against the Japanese yen. To build a strategy, we again turn to the technique of Victor Sperandeo. The target level is 113%.

Thus, the application of the principles and tools of harmonious trading allows the trader to work with greater confidence in the design of the trading system. Moreover, the combination of previously studied price action patterns and Fibonacci ratios is a powerful tool in the trading arsenal. All of us people strive for harmony, why not the market do the same?

In the following materials, we will move step by step in the study of this area of ​​technical analysis and find a slightly different application than such patterns as 1-2-3, “ Three Indians ” and others to improve our own trading.

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