Here we have a valid bearish flag pattern on FX:NGAS and now we just have to wait for the breakout, probably to the downside. Flag patterns are also consolidation patterns, just like any other harmonic patterns (cypher, bat, butterfly , crab , gartley). This pattern is usually formed after a strong movement in price action. There are 3 main parts to this pattern: the flag pole, flag portion, and the continuation portion. After a strong movement, a strong selloff in this case, the market starts to consolidate and we expect the market to breakout in the direction of the flag pole, in our case to the downside.
After getting the breakout, the target is equal to the length of the flag pole, which is 315 pips for this setup. Also a key point to keep in mind is that, the longer the market stays within the consolidation zone (flag portion), the stronger the breakout to the downside will be. The invalidation point for this flag pattern is when we get a break AND close above the upper rising trend line of the flag portion. See the chart above for more details.
Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Thank you everyone for all the SUPPORT that you have given me so far, I truly appreciate it. Good luck everyone :)
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UPDATE #1: Hello traders, we recently got breakout of the bearish flag pattern BUT it is not a convincing type of breakout. Need to stay cautious, don't need to rush into entering short. We need to see the market respect and stabilize beneath the breakout level, before opening a short position.
CHART:
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UPDATE #2: Hello Traders, we finally got a very favourable breakout of the bar flag pattern. All we need to do now is wait for a valid retest of the broken level before opening a short position :)
Đóng lệnh: đạt mục tiêu
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Hello Traders, target has been hit. All positions are now closed for this setup :)
Hey man, how's it going? Great to hear from you again. Thank you for the kind words. Unfortunately I didn't took this trade because I was waiting for a valid retest of broken structure before going short. I knew this explosive move was likely to occur, but it just didn't fit my rules. I was also not interested in chasing it either, got many more opportunities on other instruments. Did you got into this trade? :)
smitheric1970
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Great analysis, very clean! Thank you!
moneymaking
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Hey smitheric, thank you for the kind words. Your welcome :)
IvanLabrie
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This usually happens on good trades, you're proved right very quickly, and it doesn't give you a chance to think twice.
That's why I usually take a stab with a small entry in case the retest doesn't come.
moneymaking
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Oh yeah mate, you are absolutely correct. I have seen that happen many times but I have also took some big losses due to chasing trades. I will stay on the conservative side for this one, since, as mentioned earlier by fulltimetrader, this market is at it's historic lows. So this move to the downside might be a trap for sellers and then maybe it could turn back to the upside. Anything is possible but I am not in a hurry to short on this just yet :)
ElPatron.Y
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Great short, I would hold it down untill 2.2
ElPatron.Y
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ElPatron.Y
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Horizontal support has been broken, no sign of reversal yet all eyes on channel support.
moneymaking
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Yeah thank you for the chart mate, now have a bigger picture in mind. Appreciate it :)