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Best Practice: Failed BM can lead to a possible WRMB on GBPUSD

A good trade plan allows a trader to potentially capitalize on various opportunities even when an analysis changes.

Current picture on the H4 charts

A Look at GBPUSD on H4 Charts

A Look at GBPUSD on H4 Charts

  • Previous bearish expansion below 4 x H4 boxes would have fit a BM criteria. However price turned up the next week.
  • If price continues to clear above the resistance zone of H4 boxes low, a WRMB condition would be met.

Big Picture look on D1

Immediate Resistance in GBPUSD D1-Charts

Immediate Resistance in GBPUSD D1-Charts

  • Price still needs to clear above an immediate resistance on the D1 charts to head higher and fulfil possible D1 pattern.
  • If price is unable to clear the resistance, look for a retracement to pt2 in the form of a 1234 in the lower timeframe in line with the WRMB.

Updated (8th Apr 2014 by Jerome)

Current immediate  resistance can be seen clearly on the weekly charts

Immediate Resistance as seen on GBPUSD weekly charts

Immediate Resistance as seen on GBPUSD weekly charts

On the H4 charts, we can see a 1234 pattern.

GBPUSD plots a 1234 on the H4 charts

GBPUSD plots a 1234 on the H4 charts

  • Price has since closed above the resistance seen on the weekly chart
  • Price has also managed to close above the F6 (Fib-R from pt1 to pt4)
  • Next possible resistance is the upper band of the ED channel 13TL and subsequently pt1.
    • If price is unable to break the 13TL, look for retracement to previous resistance turned support levels (including previous boxes highs/lows).
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4 thoughts on “Best Practice: Failed BM can lead to a possible WRMB on GBPUSD”

  1. Lau Tay Hock says:

    Hi Jerome
    Thanks for the article. Need some clarification:
    1. You are using the H4 boxes low of 17 Feb and 4 Mar for WRMB resistance. Is it incorrect to use 24 Feb and 11 Mar H4 boxes low instead?
    2. Not sure what u mean by this statement as I am unable to locate pt2: ◦”If price is unable to clear the resistance, look for a retracement to pt2 in the form of a 1234 in the lower timeframe in line with the WRMB.”
    Thanks
    Lau

    1. Jerome Lee says:

      Hi Lau,

      1.) Its not wrong to use 24 Feb and 11 Mar, however ultimately price would still need to clear the lows of 17 Feb and 4 Mar or else it could be resisted.

      2.) Based on the D1 chart, I illustrated an upflow, from there you should be able to see a larger 1234 pattern. The pt2 which I’m referring to is based on this D1 pattern.

  2. Daniel Ku Guet Liang says:

    Thanks for the clear illustration above. As at this point in time (1Apr14 0530pm), I observe a WR2B that is aligned to the downward stacking of the H4 boxes. But I also notice that the last H4 candle (5pm) did not close below the highest box low. Am I right to say then (1) there is no trigger to short based upon the WR2B strategy? (2) if subsequent H4 candle did close below the highest box low & I short, then I need to watch for price reaction near Pt 2 (1.6583) of the Long setup though the typical WR2B TP would be the bottom of the range (1.6464)? Illustration: http://www.pinterest.com/pin/403987029046463844/

    1. Daniel Ku Guet Liang says:

      Sorry. On 2nd look, I should not be looking at short. Binni’s mentioned about space just knock some sense into my mind. Please ignore the earlier post. Tq.

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