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<\/span>How to set goals by the Dragon?<\/span><\/h2>\n\n\n\n
In the classical W-shaped and M-shape, we take the height of the pattern to set the goal. The Dragon uses Fibonacci levels to set goals for taking the profit<\/a>. You can place the Take Profit<\/a> on one of the three levels of correction:<\/p>\n\n\n\n
1.The first goal is placed between 61.8% and 78.6% of correction from the Head to the Left Paw.<\/p>\n\n\n\n
$\"The$ <\/a>
The first goal for the Dragon<\/em><\/figcaption><\/figure>\n\n\n\n
2. The second goal is at 100% of correction. As a rule, this point coincides with the Head level.<\/p>\n\n\n\n
$\"The$ <\/a>
The second goal for the Dragon<\/em><\/figcaption><\/figure>\n\n\n\n
3. The third goal, the most optimistic one, is between 1.27% and 1.618% from the Head to the Left Paw.<\/p>\n\n\n\n
$\"The$ <\/a>
The third goal of the Dragon<\/em><\/figcaption><\/figure>\n\n\n\n<\/span><\/a>Where to place a Stop Loss?<\/span><\/h2>\n\n\n\n
The Stop Loss<\/a> for this pattern is placed below the low of one of the Paws. If the Left Paw is below the Right, the place the SL below this level. If the Right Paw is lower than the Left one, use the second Paw as the headline and place the SL below it.<\/p>\n\n\n\n
Simply speaking, place the SL below the low of the bullish pattern or above the high of the bearish pattern.<\/p>\n\n\n\n
$\"Placing$ <\/a>
Placing a Stop Loss in a Dragon<\/em><\/figcaption><\/figure>\n\n\n\n<\/span><\/a>Example of opening a position by the Dragon<\/span><\/h2>\n\n\n\n
Let us see how the pattern works on the example of GBP\/CHF<\/a>. As we see, there is a bearish Dragon pattern forming, we already have the Left Paw and Back. We can looks for a signal to sell right now because the Right Paw of the pattern is falling, and this is an aggressive place for the first trade. Place a Stop Loss above 1.2555, i.e. above the high of the Left Paw.<\/p>\n\n\n\n
$\"Looking$ <\/a>
Looking for aggressive sales from the Right Paw of the Dragon<\/em><\/figcaption><\/figure>\n\n\n\n
Then we can suppose that a breakaway of the ascending trendline will happy at 1.2460 — this will be the second entry point. A breakaway of the Back will happen at 1.2410 — and this will be the third selling position.<\/p>\n\n\n\n
$\"\"$ <\/a>
The second and third entry points by the Dragon<\/em><\/figcaption><\/figure>\n\n\n\n
Take the first profit when the price tests 1.2390-1.2346. The second one — at 1.2290, and the third one — between 1.2222 and 1.2130.<\/p>\n\n\n\n
$\"Levels$ <\/a>
Levels for taking the profit<\/em><\/figcaption><\/figure>\n\n\n\n<\/span><\/a>Bottom line<\/span><\/h2>\n\n\n\n
The Dragon pattern is an improved version of classical reversal patterns that can easily be found on the chart by Fibo. The author provides us with entry points and more exit options. In classic patterns, there is only one goal and one opening point. Trading by the Dragon, the trader gets three entry points, from an aggressive to a more careful one, as well as three exit options with different profit sizes.<\/p>\n\n\n\n
The pattern works well on various timeframes. The best option will be looking for the pattern by the trend.<\/p>\n\n\n\n
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