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Patterntrading

AUDNZD, 30min, potential Bat patternBack to back with a Shark pattern, that completet its "Type 1" reaction and hit T1, we now see a potential Bat pattern form. I will personally be abit more careful with this one since X point of the Bat isn´t on the absolute high of the previous swing (B point of the Shark pattern). But as with many other patterns forming in the same way, you just have to be aware of it and manage accordingly. Completet PRZ har to be tested as usual and thereafter confirmation on a bearish reaction. Also, looking at the bullish reaction we have right now it can be measured from a completed 5-0 pattern (light gray triangle). To deep reaction from the 5-0 could however invalidate the Bat pattern.
Short
by Henrik-SMCTrading
1
EURCHF, 1h, potential Bat patternIf you look at the 4h timeframe, we have had a pullback from a downtrend. If you go up another step to Daily timeframe, we've had a pullback from a uptrend - so the timeframes are a bit contradictory. This is also seen in the 1h timeframe where we recently had a more consolidating period. This allows both a bearish pattern or, as in this case, a bullish pattern to work well. It is often in consolidating periods that patterns show their best side when using standard target prices (38.2% and 61.8%). Awaiting test of the entire PRZ where the defining level is the Bat pattern 88.6% (XA). As always, a "type-1" trade is more aggressive when it comes to trail the reaction and picking a profit if you see a slowdown in the reaction. (Of course, this is something you should have in your trading plan and tested - so you know how aggressive you can be without losing your "edge".) Stop loss placed below X but keep it tight. Target prices are standard 38.2% and 61.8% for a second position.
Long
by Henrik-SMCTrading
EURAUD, 60min, potential Bat patternLooking at this potential bearish Bat pattern with great pivot points defining an almost optimal Bat pattern. The B point is close to 50%, we have a distinct startingpoint for X and, we are in a downtrend. Also, we have price levels, to your left, that has been tested couple of times falling at the same level as 88.6% - the most important level for a Bat. Looking at the PRZ I demand a clear change in price action to the downside, after testing the complete PRZ, with one or more confluence (like RSI etc.) Since the Bat pattern is a really exact pattern I will always keep my SL tight, just above X. One way to set a SL is to use ATR x1,5 or x2, another is a pre-defined amount of pips (in case of FX) or as I often set SL - a 113% AD extension. Targets is standard XA 38,2% for a first postition and 61,8% for a second. Since this trade would be in line with the trend you could either trail your second position or use a third position that you trail or set a pricetarget at an extended level. One example could be a retest of the A and C levels.
Short
by Henrik-SMCTrading
AUDJPY, Weekly, potential Bat patternIt's still a way down to the fact that we have a complete Bat pattern here but what one can draw from this conclusion is that we are in a clear downtrend where the Bat pattern's "regular" magnet down to the D point, after we got a closing under B, also helps. In a lower (time resolution) perspective, you can use this to take trades in the right underlying direction - ie. downwards. The pattern may be more of a use for "placement traders" but I use it as a travel direction ni my daytrades.
Long
by Henrik-SMCTrading