audusd-h1-20161013
AUDUSD H1, Rebounded Off From Bottom of Falling Channel and Key Rising Trendline. Gained on Crab Pattern @ 127.2%
audusd-m15-20161013
AUDUSD M15, Take Profit Levels Based on Crab Pattern, Top of Falling Trend Channel

Technical Analysis:
The price was seen gaining further on a crab pattern at FR127.2% since it rebounded off from the bottom of a falling trend channel, overlapping with a key rising trendline.

Market Sentiment:
The dollar has been strengthening throughout the week and it is very likely that it starts to weaken near the end of the week as there isn’t any fundamental reason for the¬†dollar to strengthen any further. This will cause traders to take position off the table as the price reaches a certain key level for profit taking. It is not just AUDUSD, but others such as NZDUSD, USDCHF, and EURUSD.

Trading Plan:
Long 1/2 risk after the price has made minor retracement twice since it reaches FR78.6%, the 1st take profit level, and as it resumed appreciation. To be honest, it’s a late entry.

Stop loss was set 20 pips away from the swing low of a probable 3rd minor retracement.

The next 2 key levels for profit taking will be at the FR127.2% and FR161.8% at the top of the falling trend channel.

Modification:
[14/10/16 03:20] Shifted stop loss to entry price due to holding trade overnight.

[03:49] Full Exit

Result: Gain 0.3%

Learning: Failed to follow my trading plan to take profit accordingly. The price eventually reaches the FR127.2%.AUDUSD.H1 20161014 Result.png

Stick to the trading plan no matter how many times you’ve failed for the past few trades. The basis for seven wave theory is to capture a trend and stack more positions as it reaches and retraced from certain take profit level. Early exit result in loss of potential profit.