CSCO | Corrective structure on a major levelToday I will speak about CSCO. The price is against the previous all-time high since 2002.
As you can see, the sequence we have right now happened two times in the past. The price reaches the top, makes a correction, breakout, and small throwback on the broken structure (daily chart), and we have a bullish impulse.
Based on that, we are in the situation where the price has reached the top, made a corrective pattern, and what I want to see before Trading is:
a) Breakout of the ABC pattern
b) 2 days correction
c) Trading on the new high, stop loss below the correction. Target on the weekly resistance level or below.
The expected risk to reward ratio is 4, and I will be risking 3% of my capital IF this happens as expected. Remember that the main point of Trading this way is that we are on a pattern that has happened in the past, and we are assuming that if the conditions are the same, we have certain chances to see the same resolution. My track record,d trading this way since 2019, has shown me that we can expect a 50% win rate. However, that's all we need if our average risk to reward ratio is higher or equal to 2.
Thanks for reading!
