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Thoughts about bat pattern. Some tips and secrets. Part VII.

FX:EURUSD   Euro Fx/U.S. Dollar
645 10
Welcome back, traders. It’s Wednesday and we have another edition of “Thoughts about Bat pattern”. Today we’ll talk about a very weird thing called BAMM.
My backtesting, forward testing and real trading pointed to a very interesting phenomenon. I have noticed that when price action violates B-point, it usually goes to 0,886XA to complete the bat pattern . Of course, C-point should be in its place before price action violates B)). For bear bats violation means a Higher High and Higher Close above B. For bull bats – Lower Low and Lower Close below B. This phenomenon was first described by the founder of Bat Pattern , Scott Carney. He called it BAMM. It stays for Bat Action Magnet Move. And it really works as it is called – like a magnet. Well, I repeat the idea: when B-point is violated the bat pattern usually completes.
This gives us an edge, don’t you think? We have a higher probability of one thing happening over another.
How can we trade it? We can trade it as a classical breakout strategy or we can trade it like a 2618. In first strategy we place our limits at B-point after the breakout and wait for a pull back to enter. In 2618’s we stretch fibs from the high/low of double top/bottom to a high/low of a breaking candle and place limits at 0, 618 retracement to enter. I use the second method because I truly believe that market respects fibs)).
So, what my BAMM strategy looks like? First I need to introduce a new point. I will call it “E”. It’s the high/low of a breaking candle. Suppose I am tracing a bear bat completion. After C-point completes I wait for a B-point violation. When I have a HHHC-candle I stretch fibs from C-point to this candle’s high (E-point). I place limit orders at 0,618CE and stops at 1,113CE. I use D-point as take profit. I close half of my position at E-point retest and move stops of the other half to breakeven. If price goes higher without triggering the entry, I restretch the fibs from C to a new E and modify my limit. If price hits D before 0,618CE then I delete my orders. I use stop and reverse technique to enter short when pattern completes. It means I sell two units. The first unit closes my long position and the second opens my short. For bull bats everything is vice versa.
Note I use a combination of BAMM and Bat pattern strategies. Let’s look at some outcomes.
If a bat pattern completes my BAMM wins and triggers my Bat entry. Trading Bats along I either have my Bat entries win or lose. Combining with BAMM I have a winning BAMM and a winning Bat or a winning BAMM and a losing BAT. Note that BAMM always wins when pattern completes. If BAMM loses then Bat pattern never completes and I delete my Bat entries.
Ok, that’s all for today. Hope you find my edition useful. If so, press “like” and “follow” and I will give you much more.
See the related ideas link to check my other editions
Great stuff. As always. Keep it coming.
Thank you for explaining this. I know many members are curious how the BAMM strategy works in practise. Good stuff!
Very good explanation of BAMM. I wonder one thing, you mentioned "1,113CE" and you mentioned it also earlier with some other posts. You say that you will put stops above/below 1,113 but did you mean "1,13"? There is difference between these two, 1,13% is fibonacci number (inversion of 88,6), 1,113% is not. Is it only a way to calculate stop placement or was your intend to use fibonacci level?
Tontsake
It is 1,113 or 111,3%. That's because of my backtestings. If price touches 1,113 it almost always goes all the way to 1,272 and further. So, there's no need to place larger stops.
Alexander_Nikitin
Just what I thought. Thank you for explanation and I wish you good trades.
This is just too good. Keep it up mate.
Very interesting things will be described tomorrow in my next edition of "Thoughts about bat pattern"))
Alexander_Nikitin
Looking forward to it. You have done amazingly well with your research and testing
It's only a small part of the whole. Much more to come)
Alexander_Nikitin
brilliant!
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