Closed for profit ARM:LSE

I've now closed my ARM:LSE trade as it has hit my first profit target at 575p.   This gives me an overall R:RR of 1:1.

As I stated yesterday..the price action of this stock has been resisting the drop so I decided to close 100% of my position at the first target level.

EUR/CHF Update (4)

I was stopped out at break even on this trade.    I don't like to stay in breakout trades for so long as I did in this one.....but, as I said previously, with the stop at break even...it's a free trade.

Geometry in the Markets

I am a very keen user of  both geometrical and time patterns in trading.   The chart below shows a simple AB=CD pattern.     The D completion point was on 22nd December and ideally one would like the price to be at the completion level at that time.  In this instance it was just 7c below it.   That was enough to attract my interest.     If you follow the dotted line across from the D point you can see that the price reacted at the level on 4th January and again on the 10th January before finally collapsing.   This gave added confidence to trade a reversal funnel.   the price fell 15% in 6 days.

Schroders' 1 hour chart

Here is an example of a "Fibonacci funnel" on a 1 hour chart of Schroders, LSE.   The trade was a success and it gave a RRR 4.77 to 1 ahhhhh...if only they were all like that!

Another complete pattern

This is another "Fibonacci funnel" but this time on a 2 hourly time frame.   You can see that the price traded to within 2 ticks of the target.  (I always set my limit order to be filled a little below the target...- "shading it") and this trade produced a RRR of 3.1 to 1 in a matter of 6 calendar days / 4 trading days.

A nice completed pattern

One of the patterns I look to trade is a "Fibonacci Funnel"....a breakout trade.   It's a good pattern to trade providing ALL of the set-up criteria are met.   It works on any time frame and gives clear stop and profit targets.   This is a pattern (Marks & Spencer PLC) ( LSE: MKS) which completed a couple of days back and as you can see, it hit it's target perfectly and the price has now retreated somewhat.  I like trading this pattern as you can place buy (or sell) orders with stop loss and profit take orders all at the same time.......then let the trade run its course ( subject to normal trade management, of course).  This trade produced a RRR (Reward to Risk Ratio) of 2.2 to 1.