Technical analysis
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The saying "If you hurry, you make fun of people" also applies to the stock market. Let me illustrate it with a live example. Sberbank's living "head" At the moment, a figure is forming on the chart of Sberbank's ordinary shares, which looks like an inverted "Head and Shoulders". Other articles of the master class "Stock Market. The pattern "Diamond" or "Rhombus": a dangerous signal for a trader The pattern "expanding formation" teaches not to relax A little more about TA figures: "triangle" or "head and shoulders"? "Flags" and "pennants": peculiarities of analyzing the figures Should we be tempted by heavily depreciated Russian shares? Despite the fact that the figure has not yet completed the drawing of its second "shoulder", not to mention the breakdown of the "neck line",...
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As I promised last time, today, within the framework of studying the classical technical analysis for the stock market, I will tell you what happens when the insidious figure "expanding formation" merges with the equally insidious figure "symmetrical triangle". Although it's simple: a rare and little-studied trend reversal pattern, the Diamond or Rhombus, appears on daily slices of Russian stocks. The "Diamond" pattern is strange, as the process of its formation takes a long time. Russian stock quotes are too emotional to stay in limited ranges for a long time. In the literature on classical technical analysis, you can see not only the conditions of formation and description of the Diamond or Rhombus figure, but also learn that, according to...
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Last time we discussed the magic of the Triangle pattern on the daily charts as part of our study of the application of technical analysis to Russian securities. In this article, I'm going to tell you what happens when a triangle starts to build from the "apex" instead of the "base" and forms into an "Expanding Formation" pattern. As usual, I'm not going to rewrite the book's wisdom, rather we'll immediately compare the theory with reality. The Expanding Formation pattern is not for speculation! You don't have to go far to get an example of the Expanding Formation pattern. It is on the daily chart of the most popular Sberbank stock from the beginning of 2013. The mistake many traders make is trying to trade on the basis of this pattern. On the...
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According to the plan of our training course, we should move on to the study of technical indicators and their application, but the other day I came across an interesting chart that makes me return to the topic of classical technical analysis and, in particular, to the model of uncertainty - the "Triangle" pattern. The reversal power of the "Symmetrical Triangle" pattern Analysts and stock coaches are often accused of showing only historical summaries. Today we have the opportunity to observe the technical analysis figure "Triangle" in dynamics. In free access you can find articles substantiating the reversal power of the "Symmetrical Triangle" figure for Russian popular securities. I "made friends" with these figures long ago, back in December 2007.....
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Let's continue to get acquainted with graphical technical analysis. Last time we talked about big formations - trend reversal patterns. Today I will tell you about the peculiarities of trend continuation patterns - "Flags" and "Pennants". Figures "Flag" and "Pennant". - Uncomfortable sideways The "Flag" and "Pennant" figures can be formed both after a rise and after a fall. There is often a question about the interpretation of these figures of technical analysis, because it is easy to confuse them in the process of their formation. I never try to determine on a live chart in the moment, which is forming now - the "Flag" or the "Pennant"? I start from the philosophy of formation of these figures. "Flag" or "Pennant" - is a tedious little sideways pattern in which...
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One of the most recent harmonic patterns that have been discovered relatively recently is the "5-0" harmonic pattern. С. Kornei published the first materials on this development in 2004-2005. This pattern, as well as all its "colleagues", can be used absolutely on any markets because of its construction on the basis of Fibonacci levels, which describe almost everything in this world. Description of the harmonic pattern "5-0" Let's describe the main characteristics of the pattern: the formation of the pattern "5-0" begins with a weak movement in the form of the AB segment at the end of the previous bearish trend. The point B should be located not above the level of 161.8% from the movement 0X. The impulse BC relative to the segment AB should be organized in the range from...
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Gartley's harmonic pattern "Three Movements" is a fairly well-known pattern in the circles of stock analysts and speculators, who in solving the problem of determining trading objectives give greater preference to the means and methods of technical analysis. Description of the harmonic pattern "Three Movements" In the empirical Elliott wave theory, the analog of this pattern is defined as a "diagonal triangle". Also, many people are probably familiar with Linda Raschke's "three Indians". In harmonic trading formats, we will consider this pattern, taking into account the Fibonacci ratios. In the fibo-parameters of the classical variant of the considered harmonic pattern "Three Movements" the following laws are stipulated: price movements 2 and 3 should end at the projections 1.2 or 1.618. Pullbacks of movements 1 and 2 should end at the levels 61.8%....
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Simple graphical models on and stock exchanges allow not only to get an idea of possible change of moods of participants of market battles, but also to reveal their preferences. This is achieved by joint analysis of volume and price dynamics. The most simple example is the formation of the "Dodgy" pattern on the chart, which characterizes the uncertainty of investors as to whether the current trend will continue. As a rule, it is associated with ambiguous news background or expectations of important events, in anticipation of which the market freezes, preferring to play the facts rather than rumors. As a result, there is a semblance of balance on the chart, which is reflected in the close proximity of the closing and opening prices. According to the researchers,...
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No matter how many recommendations a trader has heard regarding the advisability of trading in the direction of a trend, he will sooner or later be drawn to look for a trend reversal. And it is not surprising, because successful identification will allow not only to maximize profits by opening a position at the very beginning of the emerging trend, but also to evaluate all the charms of position trading. Searching for trend reversal points A successful long-term trade will allow you to forget for a while about the need to search for new favorable opportunities on a daily basis and surrender to the elements of the market, guided by one single principle: "let profits grow". In this regard, many famous traders have repeatedly tried to develop the concept of reversal. Who does not remember the principles of trend reversal on the pattern "1-2-3" of Victor Sperandeo, or...
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The topic of today's lecture will be the Gartley harmonic pattern, which is quite rare on the market - the Crab pattern. Harmonic pattern "Crab" was discovered relatively recently, in 2000, but has managed to gain particular popularity among adherents of harmonic analysis. Description of the harmonic pattern "Crab" Comparing it with the harmonic pattern "Butterfly Pasavento", you can determine the main difference - a relatively small amplitude of the segment AB, which in the "Crab" should not be more than 61.8% from the height of the beam XA. The most optimal variant will be the value in the region of 38.2% or 50%. The main and obligatory condition for the formation of the harmonic pattern "Crab" is the height of point D - it should be at the level of 161.8% of the XA movement. Fibo parameters...
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Continuing the theme of the previous articles, I would like to tell you about one more Gartley harmonic pattern, which is less common than the others, which is compensated by increased accuracy in predicting market entry points. Gartley's harmonic pattern "Bat" was discovered and mathematically described in 2001 by Scott Carney. Description of the Gartley's Bat Harmonic Pattern The appearance of the Bat Harmonic Pattern resembles the Gartley's Butterfly pattern, their difference is in the proportions of the "wings". The main and obligatory condition of this pattern is the retracement 0.886 from the XA movement, which is the main element to determine the Potential Pivot Zone (PPZ). The preferred parameters of the other sectors of the pattern have more maneuverability in their values: retracement at point B from...
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In this article I propose you to consider such a wonderful harmonic pattern of Gartley as "Pasavento Butterfly". The harmonic pattern "Pasavento's Butterfly" was discovered by students and followers of Harold Gartley - Jill Moore and Harry Pasavento and is an ideal model of the pattern "Gartley's Butterfly". The main characteristics of the pattern "Butterfly Pasavento" by Fibonacci levels Formation of the top B at the level of 78.6% from the segment XA - the most basic unshakable and the most empirically tested level for this top in the ideal model of Gartley's Butterfly. Of course, sometimes other variations of this point location are allowed, but such signals are very doubtful, so it is better to ignore them. Formation of the top C is allowed to 38.2%, 61.8% and 78.6% from...
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Despite the fact that recommendations to trade in the direction of the current trend remain relevant to this day, traders never tire of searching for effective methods of finding a trend reversal with the help of technical analysis figures. After all, sooner or later the trend will end, and one successful entry will allow you to make semi-annual or even annual profitability. Graphical models of trend reversal in the classical TA Methods based on divergence or other signals given by indicators are not always effective, and are also poorly understood, which makes traders more often turn to the tools of graphical analysis. According to the theory of classical technical analysis, a bullish trend change can occur if one of the following...
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Good afternoon, dear trading beginners and practicing traders! We continue our fascinating course of lectures on the topic of Gartley harmonic patterns. And today we will talk about such a wonderful figure as the harmonic pattern "Gartley's Butterfly"! The history of discovery of the harmonic pattern "Gartley's Butterfly" The pattern "Gartley's Butterfly" was graphically "discovered" in 1935, but all the ratios of Fibonacci levels to clarify the "wings" of the butterfly were calculated in a later period by students and followers of the great Gartley. It was they who developed and gave mathematical definition to several basic variations of this harmonic pattern with different Fibonacci levels. To begin with, let's consider the reference classical patterns - the most beautiful and harmonious ones. Gartley's Butterfly pattern - there is a place for...
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We continue the series of articles devoted to Gartley harmonic patterns on the market. Today we will consider the conditions of formation and principles of using the AB=CD harmonic pattern in trading. How the AB=CD harmonic pattern is formed Equal price ratios, which are expressed through Fibonacci ratios, form one of the most interesting harmonic patterns - the AB=CD pattern, which, in fact, is the main component of all other patterns. On the one hand, such a harmonic pattern will be a correction (if we look from the point of view of the Elliott Wave Theory), on the other hand, such a pattern, in most cases, is a reversal pattern. Types of AB=CD harmonic pattern The AB=CD pattern is divided into 2 types: Harmonic pattern AB=CD with retracement of point C equal to 61.8% and projection BC=161.8%.....
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Good afternoon, dear colleagues! From today we are starting a series of articles devoted to Gartley harmonic patterns. Probably, all traders, especially experienced ones, have ever heard, used or put into practice this method of market analysis. For those who are just getting acquainted with this tool, I offer a brief excursion into the history and theory of harmonic patterns. What are harmonic patterns? Harmonic patterns were described by stock theorists Harold M. Gartley, Scott M. Carney and Larry Pasavento. But their discoverer was Gartley, who published his work "Profits In The Stock Market" in 1935. In this work, the author mentions a chart pattern that can be confused with the famous Elliott Wave. The similarity...
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Using graphical models in their pure form can seem quite risky at first glance, so traders build a system of filters that allow them to select more reliable models. Time and correction dependencies as well as separate indicators are used as such filters. For example, a trader decides to make a deal only if there is a divergence on the MACD along with the "Three Indians" reversal pattern. However, such a system can no longer be attributed to the Price Action methods, which involve trading without indicators. Parent and child patterns As an alternative to the use of calculated indicators as filters, the interaction of patterns can be used. Many of them have a wave structure,...
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Opponents of harmonic trading argue that market symmetry is contrived, and market price movements cannot fit into a predetermined pattern. However, the methods of this direction of technical analysis continue to work, allowing the trader to determine important support and resistance levels, as well as to identify potential market reversal points. The graphical model "Three Steps" - the way to the pattern "Three Indians" Let the graphical configurations, using Fibonacci dependencies, occur not so often, nevertheless their effectiveness is time-tested. Today we will talk about such a variation of the famous chart pattern "Three Indians" described by Linda Raschke and Lawrence Connors in their bestseller "Secrets of Trading" as the "Three Steps" pattern. No matter how detailed the approach to...
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The more a trader is present in the market, the more he or she becomes convinced of its harmony. It doesn't matter what instruments you trade, what time intervals you use or what trading style you prefer - understanding the patterns of market price movements comes from understanding the clear interrelationships that form in the interaction of supply and demand. At a certain point in time, a trader discovers the patterns of harmonic trading. We will tell you about the method of using the harmonic patterns of Gartley to find the reversal points of the markets. Harmonic Pattern AB=CD In a simplified form, any graphical configuration can result from the failure of the market to form a new extremum (1-2-3 pattern), or from the successful testing of a previously formed maximum (minimum...
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Technical analysis figures and candlestick patterns are often used by traders both as an independent form of analysis and as a supplement to other forecasting techniques. This course of lectures can be useful for both novice traders and experienced masters. I would like to start this series with the reversal candlestick patterns "Hammer" and "Hangman". Description of the "Hammer" and "Hangman" reversal candlestick patterns The "Hammer" and "Hangman" candlestick patterns consist of one candle. They have long lower shadows and small bodies, located at or very close to the top of the daily trading range. The "Hammer" candlestick pattern occurs on a downtrend and is so named because it forges the bottom, and the Japanese word "tonkachi" for this pattern,...
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