back to the basics …

a very good friend of mine has sought my assistance in becoming a pattern recognition guru.  I do this very sparingly because before I ever accept this challenge and privilege I make sure they have read http://www.constructingtheuniverse.com/bookinfo.htm.  Why?  Because the PATTERNS fly against the convention of any modern portfolio theory, CNBC talking head pundit and, quite frankly, many noted technicians.  Flush the brain, find a pattern and take the trade ….

so, in a nutshell it comes down to 3 things : Project, Extend, Retrace.

PROJECT – the basic (no less important) is ab=cd.  (shown below)

EXTEND: from the b  point EXTEND based on the bc leg UP (or down) into the ab=cd region by 127%, 141.2%, or 161.8%.

RETRACE: Xa retrace by .618 or .707 or .786.

Where they come together … a PATTERN is formed and you take the trade.

That is ALL you will EVER need to know …

Below is the JPY 120 minute SELL pattern at/around 103.09-103.30

Make it a great weekend.

Main20140328070008

 

Leave a Reply

%d bloggers like this: