he market strategy like any other is a four-leg reversal pattern that follows specific Fibonacci ratios. A proper needs to fulfill the following three Fibonacci rules:
- AB= an ideal target of 0.786 or 78.6% of XA leg;
- BC= minimum 38.2% and maximum 88.6% of AB leg;
- CD= Poses a target between 1.618% – 2.618 of AB leg between 1.272– 1.618 of XA leg.
- And, finally, the C point must be within the range of 0.382-0. .
- Step #1 How to Draw Pattern
To learn how to draw chart pattern simply follow step by step guide – see figure in chart 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 forex Fibonacci ratios presented above.
Step #3: Place the Protective Stop Loss at 1.618 of XA
Step #4: Multiple take profit strategy: TP1 = Point A; TP2 = Trailing SL below last swing high.