Let’s look at the Euro US Dollar (EUR/USD). Currently pricing has an intraday downside bias, however, price is also testing a bullish PRZ, this a a harmonic pattern terminology for a harmonic pattern that has a completion zone (PRZ- Potential Reversal Zone) which offers a place to take profit if already in a short position, or to stalk a long position for a low risk retracement attempt. An aggressive harmonic pattern trader will enter a long position at 1.3395 with the risk below 1.3379 or 1.3344, depending on the trader’s risk tolerance. A conservative harmonic pattern trader will wait for price to hold above the top of the PRZ which is 1.3415 before entering a long trade because as long as price is inside the PRZ, there’s a probability of testing all levels inside the zone and / or a potential breach of the zone to test a nearby target, in this case 1.3344. If a long trade is entered above 1.3415, the risk can be below 1.3415, below 1.3388 or below 1.3379, depending on how much a trader is willing to risk to see if they’re right or wrong in their directional trade
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Using Nadex Binary Options to Trade EUR/USD