Happy morning traders! ☀️ Have a look at this set up from Andy Pancholi 🔥👇
Potential Set Up 16th July 2019
1. We have time cycles on the S&P500 this week.
2. This suggests that the S&P500 may reverse.
3. Looking at the S&P500 we see the following.
4. We have come up to the 1.272 Fibonacci level extension.
5. There is resistance at this point.
6. We have placed the pitchfork as shown.
7. We now need proof that this pitchfork is going to hold.
8. If the market reverses off this upper parallel then there is
a potential target of the median line.
9. Therefore we need to calculate the risk reward ratio.
10. To do this we use the 40 bar Average True Range to calculate the placing of the stop loss.
11. Then we can place in the risk reward ratio and as long as this is greater than 3 to 1 we would give consideration to taking this opportunity.
12. The ATR is 26.50.
13. The median line is the target.
14. The risk reward ratio is 6.5 to 1.