After seeing this for a while now and having a discussion with one of the moderators on this site, I wanted to clarity something about the CYPHER PATTERN. Typically I don’t like to comment on how other traders are trading but seeing how our vice president is the founder of it, I’m comfortable correcting commenting on this particular setup and hopefully the following can cut down on the amount of pattern recognition errors.
When drawing out the pattern please make sure to use the FIBONACCI EXTENSION TOOL and NOT the pattern drawing tool in order to project your “C” leg. The Fibonacci extension levels that you will see using the pattern drawing tool IS WRONG (as far as which extension it measures).
As you can see when using the pattern drawing tool a 1.564 Fibonacci extension is projected (looking like it pulls the extension from a B-A inversion). However, when using the Fibonacci extension tool from X to A and back up to X we have a 1.272 which is the needed min requirement for the "C" leg
I really hope this helps with some of you who have been confused when drawing this out.
How do you differentiate between a cypher pattern and a shark?
Akil_Stokes
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Each pattern has different fibonacci requirements for there legs
JazzForex
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Sorry for this late and probably overdue comment but I only saw this publication now. You are right. The fib ratio on the AC line of TradingViews XABCD pattern drawing tool points to the location of C relative to the AB leg. It either shows the retracement of the AB leg (if C lies between A and B) or the BA extension (if C lies beyond A).
I don’t trade the Cypher pattern myself, but if the min requirement for its C point is a 1.272 extension of the XA leg, then indeed the fib ratio on the AC line cannot be used for that (since it does not relate to that leg) and applying the fib extension tool to the XA leg would do the job. Thanks for clearing this up :)
ras6219
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nice advice and well spotted, pro trader that you are.
TradeChartPatternsLikeThePros
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good point Akil, thanks for clarifying this
Alexander_Nikitin
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Hey, Akil, you are right about extentions. However, XABCD drawing tool works fine for fibonacci retracements.
IanMFX
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That proves that we can't rely only on software auto-calculations computers. A manual intervention must always be done to verify/counter-verify the "auto-process".