With ET2, do the 21 and 50 EMA need to be constricted when a trigger bar is formed?
The reason I am asking is b/c there is a nice PB on the EUR/NZD H4 but I am not sure if it is a valid ET2 because the MA's are not constricted. Could you shed some light on this for me?
A constriction isn't necessary, but still recommended. Often, when price breaks out too soon you might find it retesting the CZ for a second or sometimes even the third time.
If you take a look at the Usd/Cad 4H IB, we had a similar situation where price blew through the CZ and then we had quite a few 4H bars sitting up at the CZ.
On the very chart (Eur/Nzd) I have highlighted 2 more such examples. (A & B) where price broke off the CZ after the first pull back (though only B appears to be a valid ET2 setup) but because the CZ isn't tightened up price pulls back for a 2nd time to the CZ.
The Pb you are talking about is caught up in a similar situation. I see we are 2 hours into the current 4H bar and price hasn't exactly broken hard in he direction of the Pb. An important factor would also be the 1.8 that price is running straight into, that you might want to consider.
(BTW this pair isn't included in the ones that I trade - it's been pretty choppy these days)
I believe . . .