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She wore a short skirt and a tight sweater and her figure described a set of parabolas that could cause cardiac arrest in a yak.
She was a blonde.A blonde to make a saint kick a hole in a stained glass window...
BEGGAR:Would you give me 25 cents for a sandwich,lady?
LADY:I don`t know...let me see the sandwich
Are we to see you performing standup at any comedy club soon?
She wore a short skirt and a tight sweater and her figure described a set of parabolas that could cause cardiac arrest in a yak.
She was a blonde.A blonde to make a saint kick a hole in a stained glass window...
BEGGAR:Would you give me 25 cents for a sandwich,lady?
LADY:I don`t know...let me see the sandwich
A rare but very reliable pattern,with a close relation to Elliott wave theory and to Fibonacci extensions and retracements for key support and resistance areas.
The pattern has 2 trade setups: One short and one long...Actually it is 2 connected patterns.
First Pattern:Uptrend with 3 consecutive higher upswings,separated by retracements of a minimum of 50% to 61.8% of the previous upswing..so,we have 3 upswings and 2 downswings....the 3 Hills...After completion of the 3 Hills,draw a trend line connecting the lows of the downswings...
Short entry:A CLOSE below the trendline triggers a short entry.
Stop:Slightly above the highest top..usual,plus spread and slippage.
Target:62% of the distance from lower low of the 3 Hills to higher high(let`s call it AB).
Second Pattern:After completion of the 62% retracement,there is a reversal to the upside which rallies from 100% to 127% of entire 3 hills range(AB)..The Mountain...
Long Entry:Entry long at the 62% retracement...once touched,at above the previous bar High.
Stop:Slightly below 62% retracement low(let`s call it C)
Target:100% to 127% of AB..from C( D in the atachment)
My Comments:
1-The second trade(long) has much better reward to risk than the first(short),and,since it is the completion of a rare pattern,probably has a better probability of working too....So,focusing on this second leg can be a valid option.
2-I have seen retracements(not necessarily of this pattern,but of sequential highs) reach the 78.6% level,they usually stop in the 61.8% to 78.6% area,not necessarily at 62%,so,I would modify the entry and stop rules to take this possibilty into account,personally,I would use a CLOSE below the 78.6% level as stop..and would enter after prices have penetrated the 61.8%
to 78.6% area and then ,either at a CLOSE above the 61.8% level or at a CLOSE above previous bar high.
3-In case of taking the first trade(short) I would like to see at least 1.5:1 reward to risk,including spread and slippage..and ,once minimally profitable,I would move the stop to break even.
Sidenote: Did you notice the embedded Dragon pattern at the attached chart?
Dragon long entry for gbpjpy m5...see attached chart..entry long @197.57..stop is approx at 60 pips distance and target at 100 pips distance,with an approx reward to risk ratio of 1.66:1..I will handle this trade with the stlm2 digital filter..on several time frames,and the stop,if necessary,on bar close,so the actual exit might be different from the "plan"...
Trade was closed at 198.25,for a 68 pips profit,after several hours infructuosly trying to breakout previous highs...Additionally at 17:54 there was a short term countermove,detected by checking both m5 and m1 STLM2,so we temporarily(11 minutes) hedged the position for an additional profit of
34 pips,for a total of +102 pips...see attached detailed statement,last 2 trades.
Regards
Simba
2B PATTERN SHORT: Uptrend,prices penetrate previous high,fail to carry trough and drop below previous high
Entry: Sell below low of breakout bar(see line @1.7195 in attached example).
Stop: Above,usual:spread+slippage,previous high.
Target: Previous swing low,or previous support area.
2B PATTERN LONG: Downtrend,prices penetrate previous low,fail to carry trough and raise above previous low.
Entry: Buy above high of breakdown bar.
Stop: Below,slippage etc,previous low.
Target: Previous swing High or previous resistance area.
My Comments: 1-In case,as in the attached example,the breakout bar distance from close to lows is too small I prefer to wait for the penetration of the following bar low(high for a long)
2-I personally prefer to use stops at bar close above/below previous high/low,and to move stop at breakeven or take partial profits once in the move.
3-I prefer to use ,besides the targets indicated above,Fibonacci ratios of previous move,usually coupled with digital filters(stlm2 mainly),so,if the market is around the 50% Retracement area and the stlm2 of several timeframes turn around,I take profits .
See the attached example,with a very recent entry, for EURAUD D1.
Linear Mode
