Thoughts about bat pattern. Some tips and secrets. Part III.
Hello, traders. It’s Wednesday here. It means we have another “Thoughts about bat pattern” edition. It is the third edition and if you have missed the first two, check the related ideas links. You’ll find them very useful. Let’s get it started then)).
As I told you in the first edition Timeframe doesn’t matter in bats. Mostly because bat pattern pays no attention to candle closes. The only thing you need is the size of XA leg. If this size is very small, then your Fibonacci ratios will NOT work well. There’s the fact – the larger the move, the more precise Fibonacci ratios calculations. But very large move involves very large risk. See “Thoughts about bat pattern” first edition to find out what size of XA was proven to be optimal.
Ok, today we’ll talk about the MOST IMPORTANT thing in bat pattern recognition. It’s XA leg. The topic is huge enough, so I will need to spend more than one edition to cover it.
If you are somehow familiar to advanced patterns then you might have heard the rule: XA must be an impulse move. THAT’S COMPLETE RUBBISH.
HERE”S THE TIP #4. XA must not only be an impulse leg. It may be whatever market movement. The only thing you have to pay attention to is X point location. It must be some sort of structure, a point where price changed its direction. If we see a trend (or some huge market movement) reversal in this point, then this point is called “major structure”. If we see some small movement (correction or whatever) reversal in this point, then we are facing minor structure. Triangles, flags, wedges are also serve very good structure areas. X point is usually situated on either boarder of these formations. XA move may also unite two or more impulses. There’s an algorithm of detecting XA. This algorithm has proven its effectiveness. It consists of a series of actions (mostly mental) that if done allow you to detect the most appropriate XA. I will reveal the algorithm itself next time. Today I will only give you a hint: X-point is not the first point that must be detected to find an appropriate XA move.
Well, it’s all for today. If you like the edition press “thumb up”. Follow me on Tradingview in order to be sure you won’t miss the next edition.
P.S. If price comes to breakeven you will have a chance to enter short the bat pattern detected on the chart))
As I told you in the first edition Timeframe doesn’t matter in bats. Mostly because bat pattern pays no attention to candle closes. The only thing you need is the size of XA leg. If this size is very small, then your Fibonacci ratios will NOT work well. There’s the fact – the larger the move, the more precise Fibonacci ratios calculations. But very large move involves very large risk. See “Thoughts about bat pattern” first edition to find out what size of XA was proven to be optimal.
Ok, today we’ll talk about the MOST IMPORTANT thing in bat pattern recognition. It’s XA leg. The topic is huge enough, so I will need to spend more than one edition to cover it.
If you are somehow familiar to advanced patterns then you might have heard the rule: XA must be an impulse move. THAT’S COMPLETE RUBBISH.
HERE”S THE TIP #4. XA must not only be an impulse leg. It may be whatever market movement. The only thing you have to pay attention to is X point location. It must be some sort of structure, a point where price changed its direction. If we see a trend (or some huge market movement) reversal in this point, then this point is called “major structure”. If we see some small movement (correction or whatever) reversal in this point, then we are facing minor structure. Triangles, flags, wedges are also serve very good structure areas. X point is usually situated on either boarder of these formations. XA move may also unite two or more impulses. There’s an algorithm of detecting XA. This algorithm has proven its effectiveness. It consists of a series of actions (mostly mental) that if done allow you to detect the most appropriate XA. I will reveal the algorithm itself next time. Today I will only give you a hint: X-point is not the first point that must be detected to find an appropriate XA move.
Well, it’s all for today. If you like the edition press “thumb up”. Follow me on Tradingview in order to be sure you won’t miss the next edition.
P.S. If price comes to breakeven you will have a chance to enter short the bat pattern detected on the chart))
