Anticiaption of Pattern Targets
November 20, 2012 12:50 PM

I am a big believer of Confluence Zones. When price levels from multiple trade setups (could be totally different) gives a confluence, this has a bigger meaning for me. I never use price levels to trade. I trade Pattern Setups NOT the price levels. So, this price level confluence I use it for mostly EXITING the trades but not enter the trades. Anticipation is an emotion where we expect a certain event (could be good or bad) to happen. In trading world as part of trading plans, we must expect or anticipate objective ideas of how a trade may result. In other words, we trade a setup or pattern and anticipate it to reach target or hit the stops…

Today I was trading an ABC Bullish pattern in ES 1220 Tick charts. This ABC Pattern does not have 62% retracement but after a C retracement (58%) it started trading above 200-SMA. This itself is a confidence booster. The EL was also trading above MidBand at 1383. I thought it was a good entry at 1383 with a stop loss at 1381. Then came the analysis of my potential targets. From ABC, 62%AB is at 1386.25 and 79% is 1387.5. Now from Fib. Zone Pivots, the first FZP resistance zone is at 1386.5 to 1388. This phenomena occurs pretty regularly. So, I thought I have a great chance of trading ABC for at lease 3 points Profit (to 1386.5) with a STOP at 1381.5.

Trade was entered at 1383 (EL above 200-SMA and Mid Fib. Band). Target: 1386.5. Here is how the trade worked. I exited 3 contracts at 1386.5 (3.5 pts profit) and then I waited for my next target 1387.5. 1387.5 was traded but my next target was never filled. My Trailing Stop Loss was at 1385. So, I exited my second set of Contracts at 1385 (netting 2 pts Profit).

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