Silver/USD Short
Here on the 4 hour chart we have what some would see as a bullish 3-drive pattern. However, in recent times, I have had more success trading the third wave (as suggested by my friend @LewisGlasgow).
In this pattern the first retracement hit the 0.618 level, thus I will look for the second to do the same at the top of the channel. Should price hit the zone, I will look for a short candlestick formation. That said, should the minor support area highlighted above be broken, I will likely take a short position. This entry would mostly based on the urgency with which the level is broken- a dominant engulfing candle, long day candle etc.
Either way, I will hold my position until price is on par with support of the first drive- then leave half of the position until price hits the bottom of the channel. When this adjustment is made, I will also bring my stop-loss level to align with my entry price to bulletproof the trade. At Six Figure Capital, we're all about risk management! Risk is currently sitting at 1:3- should I decide to enter early, I am convinced that the lower entry will not require the same stop loss. The adjustment should allow for the risk/reward level to remain relatively unchanged.
See my AUDUSD short below where I took this exact same position and price turned TO THE PIP!
Three Drives ratios:
In this pattern the first retracement hit the 0.618 level, thus I will look for the second to do the same at the top of the channel. Should price hit the zone, I will look for a short candlestick formation. That said, should the minor support area highlighted above be broken, I will likely take a short position. This entry would mostly based on the urgency with which the level is broken- a dominant engulfing candle, long day candle etc.
Either way, I will hold my position until price is on par with support of the first drive- then leave half of the position until price hits the bottom of the channel. When this adjustment is made, I will also bring my stop-loss level to align with my entry price to bulletproof the trade. At Six Figure Capital, we're all about risk management! Risk is currently sitting at 1:3- should I decide to enter early, I am convinced that the lower entry will not require the same stop loss. The adjustment should allow for the risk/reward level to remain relatively unchanged.
See my AUDUSD short below where I took this exact same position and price turned TO THE PIP!
Three Drives ratios:
- Retraements: 61.8%-78.6%
- Extensions: 127.2%-161.8%
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