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How to Trade the Chart Pattern
The market strategy like any other is a four-leg reversal pattern that follows specific Fibonacci ratios.
A proper chart pattern needs to fulfill the following three Fibonacci rules:
AB= retrace to 0.618 of XA leg;
BC= minimum 38.2% and maximum 78.6% of AB leg;
CD= Poses a target between 1.27 – 1.618 of AB leg or an ideal target of 0.786 of XA leg. The shares some similarities with the .
Step #1 How to Draw Pattern
To learn how to draw simply follow step by step guide – see figure below for a better understanding of the process:
First, click on the indicator which can be located on the right-hand side toolbar of the TradingView platform.
Identify on the chart the starting point X, which can be any swing high or low point on the chart.
Once you’ve located your first swing high/low point you simply have to follow the market swing wave movements.
You need to have 4 points or 4 swings high/low points that bind together and form the strategy. Every swing leg must be validated and abide by the Fibonacci ratios presented above.
Step #2: How to Trade Chart Pattern: BUY at Point D which should satisfy the requirement CD = 1.272 – 1.618 of AB leg.
Step #3: Place the Protective Stop Loss below wave X
Step #4: Take profit equals the same price distance of the XA swing leg as projected from the D point
Trade Chart Patterns Like The Pros
Follow this link this web provided great screener of all pattens but not Harmonics pattens