Reverse use of the Trade Focus Numbers

Another Example of the Reverse use of the Trade Focus Number - GBPCAD

1)   PA crosses the trade focus sell number for a potential sell trade at point A  

2)   We have a setup and question arises whether to take the trade or not. Then I noticed two things:

- potential bullish divergence

- no trigger candle closing below the setup candle

3)   As envisaged, PA goes back North for possible retracement or reversal which nobody knows at that time!!!

4)   I can do either of two things:

- buy on MA crossover @ 5725 with confirmation from CSM & MACD; put my stop @ 5700; and/or

- be conservative by allowing PA to move (to B) and retrace (back to C), and buy on resumption of the uptrend @ 5753 with stop @ 5736

5)   My PT1 on the 1st option will be the trade focus buy number @ 5760 for 35 pips; and PT1 on 2nd option will be the 61.8 FE level @ 5782 for 29 pips;

6)   PT2 will be the FE100 level @ 5810 or we can anticipate completion of a possible AB=CD pattern which happened exactly at point D (73 almost equal 71);

7)   PT3 will be between the FE127.2 to FE161.8.

I find this reversal trades happening very frequently on daily basis, and hope you find this useful.

George

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