Coiled Bottom - Unique Bullish Pattern (GBPCHF, H4)

29. Apr. 2022

This is one of the patterns that I've been trading for years that I discovered on a GDX weekly chart. I call it a "Coiled Bottom". Basically the market has two up and down waves that acts as a coil. You look to buy at 61.8% A2 or lower of the second down wave (B2). The main target is 1.618 of the second down wave (B2). My entry is a cross of the "entry cross" level. My stops are about 2/3 the distance of the up-wave. The target is at 1.2675 (1.618 B2). One other thing.... the cross of the "entry cross" level needs follow through from two bars. If that doesn't happen it tends to stop-out. So i'll be waiting for the orange line with a limit order and for there to be a "good" up bar showing people have entered positions. If that doesn't happen or if it corrects a small distance into the cross bar then I'll exit for a small loss and wait for another test of the same level to enter again. My risk on this trade is 2.75% (this fits my risk tolerance).