BAMM is abbreviation for Bat Action Magnet Move. The essence of this technique is based on location of mid-point (B) within the pattern structure. Any B point with a retracement less than 50% resulted in a completion point that was closer to the initial X point.
In the Bat pattern when CD leg exceeded the B point, the price action would test the 0.886 retracement of XA leg. This will give an oppurtunity to capture the segment of CD leg instead of waiting for the ultimate completion of the larger pattern.
The trigger of this trade is based on the price action breakout B point.As seen on the hourly chart for EURJPY, B point was at retracement of 0.382XA. When C point complete at retracement of 0.886AB it will validate the Bat pattern. Once CD leg had breakout the B point, BAMM was triggered. This technique should give best risk reward ratio as the stop loss will be put just below B point and the target is at retracement of 0.886XA.
Trade Details :
Entry : 114.99
SL : 114.60 (39 pips)
Target 1 : 115.71 (72 pips)
Target 2 : 116.33 (134 pips)
Exit all position at 115.27 with
28 pips profit. The reason i exit this trade early is because now on H1 chart got bearish 5-0 pattern. This pattern completion projection was at a convergence of 0.500 retracement of AB and 2.00 retracement of BC which is at 115.70. I had exit early before the 5-0 pattern completion is because based on other EUR pair is start showing some weakness and this week show a lot of the pattern had reverse before price action testing the PRZ Zone. As a reminder to myself "When in a doubt,take your profit and cut your losses quickly" . However, i'm satisfied with this trade.
Tuesday, July 19, 2011
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