EURUSD: Building A Case For A SHORT Entry

This isn't a trade....yet! But I just want to show you how I try to build a scenario for a trade. If things go as I think it may, I will be going SHORT on this pair shortly. However, this being Friday and the weekend coming up, it would need to be a trade that needs to be held over the weekend if taken.

PATTERNS
There is a POTENTIAL bearish bat that is very close to being filled. It's not filled just. Around this area that the bat would fill, there would also be a valid B point for a POSSIBLE POTENTIAL bullish shark pattern with a good looking BEARISH 5-0 pattern that would follow. I say "good looking" because the completion of the 5-0 pattern would place it at or near the minor resistance structure again. I am not saying that this structure level is of THAT great an importance but it's there.

WAVE COUNT
I've been trying to get a handle on this wave (4) wave count and so far have failed as per my 2 previous failed trades on this pair. It's always tricky to try to catch the end of a wave let alone a CORRECTIVE wave. But by taking only trades that have a very tight stop loss, I can limit the damage. Knowing that there is a impulsive wave following, I know that any losses suffered as long as they are small, can be recovered easily.

So here, the recent price action has cleared up the wave count picture on this wave (4) significantly. I can now confidently say that the wave (4) is unfolding in a complex WXY pattern and that WXY is a 3-3-5 flat. The Y wave itself is a abc 5-3-5 zigzag with the c wave now finishing in 5 waves. But I am waiting on the 5th wave of that wave c to finish with probably one more push to the upside (my current placement of the labeling notwithstanding and to be adjusted as needed to reflect that final move).

CONTROLLING THE DRAWDOWN
If I were to enter the trade now (which I'm not but is a possibility soon pending bat pattern completion AND bearish price action), I would placec my stop ABOVE the upper trend line of the larger triangle pattern which could be a strong resistance area if reached. From the bat completion to that area would be about 60 pips on the drawdown. Obviously, should prices turn bearish and decline in a wave (5) as I am thinking it will as per my previous bearish analysis on this pair (see Related Ideas: "ANALYSIS #1: EURUSD: BEARISH In Downtrend But How Far Will Go?"), then that 60 pips or more would be recovered easily.

CONCLUSION AND MY TRADE PLAN
Can this pair keep going up? Sure. Anything can happen and nothing needs to go according to what I say it will. I don't have THAT kind of influence! But by the price action alone, this pair has been positioning for a move down.

I am holding off on entering SHORT for just a little longer. I'm waiting to see the bat be completed AND some bearish type price action to occur before I get in....again! With prices approaching that upper trend line of the triangle, I'm sure there are many SHORT orders just waiting to be triggered. As well as I am aware that the "big boys" also know this and there may be some spiking price action to take out stops before prices move down. This is just ONE of the reasons that I am holding off a little bit longer to see how things unfold. Spiking and reversing would constitute bearish PA to me. This is NOT saying this is what WILL happen. It's just something I'm looking out for.