albert.callisto
Long

The Rule of Seven - Defining targets (bullish version)

FX:EURUSD   Euro / U.S. Dollar
109 1 7
Fibonacci is not the only way to define levels, there are other levels such as those by Gann or the "Rule Of 7".
It's quite simple and is based on fractions of 7 hence its name.

The coefficients between a bullish and a bearish leg are different. Here are the rules for bullish objectives.

  • Pick the base (could be a key level or a support), this value is B
  • Look for the first pullback level, measure distance between base and the pullback, this is D
  • 1st objective: B + H*7/4 (high probabilty)
  • 2nd objective: B + H*7/3 (med. prob)
  • 3rd objective: B + H*7/2 (low prob.)
  • 4th objective: B + H*7/1 (lowest prob., needs a strong momentum)

For bearish objectives, the coefficients are not 7/4,3,2,1 but 7/5, then 7/4, 7/3 and 7/2, so the first bearish objective is B - H*7/5. I will post a bearish version of the chart if readers are interesting.

Want to know more? you can read this: http://www.edwards-magee.com/ggu/ruleofseven.pdf
Just read and tested a bit on edwards-magee rule of 7 and I can surely say this is a promising concept. Such as other counting tools I've learned over the years. Thanks
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