I am back with one more -- The
For a brief overview about fundamentals, first go to the Post One of this series (link will be soon in the update section).
In the BAT and the the price action in the last leg did not stretch beyond the Point X but In this pattern last leg stretches beyond X. In this case it is the B-C projection which may sometimes (when D extends beyond 2.618 B-C) help in identifying the Pattern in advance.
X-A: A strong leg which ends at an important level.
A-B: Should retrace between 38.2 to 61.8% of X-A.
B-C: Should retrace between 38.2 to 88.6 % of A-B. This leg should not extend beyond point A.
C-D: The most important leg to confirm the . C-D should retrace 161.8% of X-A and not more than that.
C-D=1.27 to 1.618 AB: Second important confirmation, C-D leg should complete between 1.27 to 1.618 times A-B
B-C Projection: Point D should be between 2.618 to 3.618 B-C projection. You can notice the difference between Bat, and B-C projections.
Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point.
# In an upward reversal is expected at point D, whereas in patterns a downward reversal is expected at point
# Normally a buy/sell order is placed at point D, expecting some sort of reversal, and targets are placed at 38.2% and 61.8% of A-X.
# A complete reversal should not be expected at point D in any . Only the further price can provide confirmations about trend reversal.
Trade safe, be healthy
Hit like/comment if this information is useful.
I could v ended this series in a single post but there was need to elaborate each and every pattern to highlight the differences. That was the only purpose behind the series.
Sharing knowledge brings satisfaction and minimal viewership.. discouragement.
Ironically, readers do hit likes on funny pictures.