J_Graystone
Long

AUDUSD Bull Gartley at Market

FX:AUDUSD   Australian Dollar / U.S. Dollar
942 14 28

Going through my premarket analysis for the London Live room this morning and thought I would bring this one to the attention of any advanced pattern traders.

a few other things on the radar this morning so looking forward to the live room session. See you there.

Gartley Pattern @ 0.7015
Target 1 = 0.7092
Target 2 = 0.7062

Stops below X

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BOOM!!
+1 Reply
Nice Trade!
Reply
nice prediction for target 2
+1 Reply
Thanks. Although its not really a prediction. We never know what the market is going to do. All we can do is trade the patterns the same way we backtested them. We want to mimic our backtesting results right? Cheers.
+1 Reply
techfund J_Graystone
We can actually know what the market is going to do to a certain extent by combining technical patterns with fundamental variables. e.g. run a regression comparison with aud and its main export iron ore you will find a co variance. Its is an extremely difficult task to develop an econometric models e.g. the ARIMA and GARCH model on forecasting currency using fundamental variables but those 1% of traders that can are extremely successful. As a researcher i back test using multiple variables e.g. interest rates, inflation etc and look for clues for trend breakouts using journals like the following http://www.sciencedirect.com/science/article/pii/S0378426603002772.
Reply
I personally dislike patterns containing more than one swing in XA leg. I like XA to be only one swing and ABCD movement be a complex correction to this swing. Although, I've done lots of research work on harmonic patterns, I do not trust my eye only. Depending on your mood, your eye will give you different XA legs. That leads to doubtful situations when slight movement of X-point can turn a Gartley into a Bat (if X-point movement results in stretching XA) or a Bat into a Gartley (if X-point movement results in contracting XA). Every time this happens you need to decide either you take the first, the second or both. Of course it will be a pure guessing if you didn't backtest this particular situation. It sounds strange, but when you have a losing attitude (because of a losing streak or else) your eye will tend to chose mostly losers among them. This situation is not the only one. There are some more, in which you simply do not have any edge over the market if you use eye identification. That's why I elaborated my own swing identification technique. It is based on Dow principles and divides the chaos on the chart into impulses and corrections. It is purely mathematical. 100 traders using it will have absolutely identical drawings on their charts.
+1 Reply
J_Graystone PRO Alexander_Nikitin
Nice.
The reason we put hundreds of hours into back testing is so that we can build up our reticular activating system which allows us to identify the same impulse leg each time. Remember as long as the pattern is profitable (whish it is hugely) then all that matters is we trade the same way we backtested because after all, we want to mimic our backtesting results and nothing else right? This was a pain free winner. Thanks for commenting.
+1 Reply
Agreed, as lon as the pattern is profitable in backtesting we only need to repeat the results. To do that we need to identify patterns the same way we did in backtesting. Yes, this one was a pure winner. I don't say your method is worse than mine. I just think it requires more skills and experience to trust your eye. Mine is simpler because it is based on calculations. In each and every trade I am sure I identify the pattern exactly the same way I did it in backtesting. Thanks for responding)
+1 Reply
Nice find, I'm looking at this on the slightly longer term.
snapshot


The week opened with a gap which is not visible on the TradingView charts. We already put in an AB=CD move which brought us to the top (B-point) of your Gartley pattern. We retraded back into previous resistance/support completing the Gartley. I'm looking for a potential 3-drives move right into the week open, where we have a nice Fib cluster (0.786 retracement, 1.272 this weeks low, 1.414 previous low and 1.618 of inverse extension of current low). Since we are putting in new HH and HL, for me chances are good that we will try to at least reach the border of that gap.

Option 2 ; if current lows do not hold and we break below structure we have a potential bull cypher setting up.

What do you think ? ;)
Reply
J_Graystone PRO Nico.Muselle
I think that you are well ahead of the market which is great and have your "IF>THEN" thought process well under wraps! Nice Work. ;-) Its the best way to have the decisions taken out of your trading which is what we want.
+1 Reply
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