This chart is very busy. Please just look at the candlesticks and what's in yellow.
Its 11:17pm ET on 3/3/2021 and I'm looking at the Euro/US Dollar March Futures on the hourly chart. I see an XABCD (or Gartley) pattern developing. The X,A,B, and C points have been identified in yellow. The D point hasn't formed yet, assuming it does in the near future.
We want the D point such that D=C-(A-B) and therefore, AB=CD. You also want D on a Fibonacci level based on XA. On this chart D=1.20835-(1.2116-1.20455)=1.2013. The closest Fib is the .786XA=1.2116-.786(1.2116-1.19945)=1.20205.
We'll use the 1.20205 to enter because we may never hit the 1.2013. And we'll use targets based on the 1.2013 because they will be closer than targets based on 1.20205. Then, when the actual D is known, if ever, we'll adjust the targets accordingly.
I decided to initially enter 2 orders using the M6E mini contract, where 1 point is $1.25 rather than $12.50 on the full size contract. Then when we're in the trade and its going in our favor, we can add positions and targets. The 2 orders are for 2 targets, namely the .5AD and .618AD levels. The .618AD is the "real" target. The .5AD is just gravy along the way. It also provides a cash cushion in case we reverse and hit the Stop before hitting the .618AD target. The Stop will be just under the X point at 1.1993.
Here are my orders on the IB TWS platform:
The risk, based on just one order is:
1.2021 - 1.1993 = 28 pips * $1.25 = $35.
The reward, based on just the .618AD target:
1.2076 - 1.2021 = 55 pips * $1.25 = $68.75
So, the Risk/Reward is 68.75/35 = 1:2 which is good.
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