How To Exit A Trade With A Pattern.

AudJpy was one of the markets doomed for a sell off after an analysis, based on elliot wave theory, that Japanese Yen was expected to strenghten across board, which means that Yen pairs were expected to fall.. 

Yen Pairs fell sharply days after the forecast.

 

AudJpy's decline from 97.399 was expected to be in 5 waves trendy move. 

 Wave 3 of this impulsive move tend to be in progress after the completion of the first two waves.

 

 

 

 The 4th wave of this 3rd wave was clearly corrective. 

It was a double zigzag corrective pattern. Double zigzag is one of the corrective patterns I trade.

 The ending formation of this zigzag looked terminating. 

I put a sell order at the break of the supporting trendline at 91.69 risking 89 pips at 92.586. 

The final target was below 89.12. I expected price to move sharply downward. 

 

 

 

 

 

Price responded to the break and after many hours, formed the chart below

 

 

Price reaction to the end of a zigzag should be motive in nature. Price went sideway instead and completed a triangle. At the break of the triangle, I exited the trade totally with a loss of 15pips instead of 89 pips, that was a great loss cut.

If the above wave count will be validated by price, it should soar higher to complete a deeper correction before the bearishness starts.

If price likewise falls in the region of the triangle and break it below in what may look like the completion in a motive mood, my first analysis will hold and I will have missed a good profit.

The triangle formation is an anomaly and one should not trade with a mixed feeling.