Alexander_Nikitin
Education

Education post. Part VI

FX:AUDJPY   Australian Dollar / Japanese Yen
The table above describes all possible pattern variations: harmonic gartleys, advanced gartleys, pesavento gartleys, harmonic bats, advanced bat and UG. If you look closer, the range of ratios covers everything.

Now, let's go into some details...

1) Intro
In this test the patterns were found and drawn by MPS. The algorithm of swing identification was set to "prex(12)". This means I was looking at highest highs of past 12 candles and lowest lows of past 12 candles as swing pivots . The FastBacktest utility automatically wrote down all patterns details including time, entry, stop, target, B ratio, C ratio and more into excel spreadsheet. This methodology of market research eliminates subjectiveity, human errors and it compresses the time. But you can easily verify the results manually (old-school) if you wish.

2) Trade plan
I was testing naked pattern. No reversal confirmations by indicators, priceaction or oscillators. Simple set-and-forget. If it works then it works, if not then not.
Entry: Limit order at 0.786XA (always).
Stop: 1.05XA.
Target: Risk distance calculated and then projected to have 1:1RR ratio.
Result: A pattern was considered a winner if priceaction reverses and hits takeprofit before it hits stoploss.

3) Statistics.
Testing period was 1999-2019 (20 years!). Pair was AUDUSD Timeframe was 30M. Total amount of patterns found was 863. Left-top corner number is the probability of win. Right-top corner number is the total number of setups. Left-bottom corner number is the losses count. Right-bottom corner number is the wins count.

4) Conclusion.
I think objectivity is the key to any scientific research. Next time, when you read a book, an article, watch a video or attend a pattern trading course ask yourself a question: "Are the results they are talking about really testable, verifiable and repeatable?" Run away from those mentors who don't tell you the swing identification method. Based on my research, different swing identification methods produce different results. If you would ever wish to use this table in your trading make sure that you find swing with prex(12) method. This research is only true for AUDUSD , 30M.

In my trading I go with the pattern (standard way) if the cell is green and I go against the pattern (reverse way) if the cell is red. This way I always stay on a higher probabilities side.
Comment: The B3C5 cell should be red, of course. The probability is 48.05% which is below 50%
This pattern was found by the MPS-v5.5 pattern recognition software: https://mps-trade.com

My YouTube channel: https://www.youtube.com/user/alexniquitos/

Related Ideas

It's the most impressive piece of work I've ever seen. Great job!
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Alexander_Nikitin Captain_Walker
@Captain_Walker, Welcome, Cap.
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hi Alexander,

Im curious why did you use prex(12) ? Just want to get your thoughts on why you chose 12 , instead of a number higher or lower? and if so did you also run data on those prex ?

Thanks for your response.
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@ChiNguyen, I ran tests with different settings. 12 is the optimal. If the period is less too many noisy swings are detected. if the period is more too many meaningful swings are skipped. It won't make any big difference if you increment/decrement the period by 1-2.
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Thanks a lot Alex!
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Alexander_Nikitin Tahminci_Ciragi
@Tahminci_Ciragi, you are welcome.
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Really great work and big thanks for sharing this!
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@rludvik, welcome:)
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RESPECT SIR
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@elfarouk, thanks:)
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