TomHall

LEARN TO TRADE THE CYPHER PATTERN

FX:EURUSD   Euro Fx/U.S. Dollar
STAGE 1:
THE BULLISH IMPULSE LEG

A bullish impulse leg is a strong move in price action to the upside.
The impulse leg can be a mixture of bullish and bearish candles, but must have a bullish overall direction.
The start of the impulse leg should be marked as X and the top of the impulse leg should be marked as A.


STAGE 2:
B LEG RETRACEMENT

Now that you have identified your X to A impulse leg you are now looking for the B leg, which is a retracement of the X to A impulse leg.

Take your Fibonacci retracement tool and draw from your X leg to your A leg.
The crucial Fibonacci levels you are looking for are the 38.20% and 61.80%
Price action must at least touch the 38.20% retracement but cannot close below the 61.80% retracement.

As you can see by the illustration, the candle does not need to close below the 38.20% retracement but must at least spike through.
The bullish Cypher pattern will be invalid if price action closes below the 61.80% retracement of the X to A move.


STAGE 3:
C LEG EXTENSION

Once you have identified a valid X to A impulse leg and a B leg retracement,
you are now looking for a valid C leg extension.

Take your Fibonacci extension tool and draw from X to A and then back to X.
The crucial Fibonacci extension levels you are looking for are the 127.20% and the 141.40%

Price action must at least touch the 1.272% but cannot close above the 1.414%.
As you can see by the illustration the candle does not need to close above the 127.20% but must at least spike through.

The bullish Cypher pattern will be invalid if price action closed above the 1.414%


STAGE 4:
D LEG COMPLETION

Now that you have a valid X, A, B and C move you are looking for the final leg in price action at which point you will buy the chosen currency pair.

Take your Fibonacci retracement tool and draw from your X leg to your C leg.
You are looking for a 78.60% which will now give you a valid D leg completion of the bullish Cypher pattern .


STAGE 5:
PLACING YOUR TARGETS

When looking to take targets on the bullish Cypher Pattern the first step is to use your Fibonacci retracement tool.

With your Fibonacci retracement tool draw from the C to D leg, you are looking for target 1 at the 38.20% and target 2 at the 61.80%.
To protect the profits you have accumulated at target 1 it is advised you move your stop loss to breakeven once the 38.20% target 1 has been attained, thus giving you a risk free trade to target 2.


KEY NOTES & RULES:

When trading the bullish Cypher pattern , the pattern is meant to be traded at 78.60% D leg completion only.
If you believe the pattern is unfolding but price is only at point B, be patient and wait until price reaches the D leg completion.
The power of the pattern comes from converging Fibonacci levels of all points from X to D.

Point B must at least touch the 38.20% retracement but cannot close below the 61.80% from the X to A move.
Point C must touch the 127.20% but cannot close above the 141.4%
Point D is complete when price action touches the 78.60% retracement of the X to C move.
Stop loss must be placed below the X leg structure support.
Target 1 at the 38.20% retracement of the C to D move.
Target 2 at the 61.80% retracement of the C to D move.


CURRENCY PAIR:
This pattern like any other is more profitable with certain currency pairs, you should do your own back testing on this before trading this or any pattern.


Website: www.UKForexSignals.com
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DISCLAIMER:

Please note I am only providing my own trading information for your benefit and insight to my trading techniques, you should do your own due diligence and not take this information as a trade signal.
Website: www.UKForexSignals.com
Instagram: www.Instagram.com/UK_Forex_Signals
Instagram: www.Instagram.com/Tom_Hall_Official
Twitter: www.Twitter.com/Tom_H_Official
reetgeert
6 months ago
quando reabastecer a conta de 100% http://goo.gl/rN5Fsd
+1 Reply
volkanyurci
6 months ago
thanks for the explanations.. they are so clear..
+1 Reply
TomHall TOP volkanyurci
6 months ago
My pleasure.
Reply
Very important point is missed. After all the requirements are filled and D-point is calculated as the 0.786XC retracement you MUST check if the D-point is exceeding B. In case of bullish pattern it should be at least 1 pip below B-point. If not, then the patterns is ivalid. D-point MUST terminate beyond the B-point.
Also very important. If price goes beyond 0,786XC then the target should be calculated as the retracement from C-point to whatever price is beyond 78.6. It means that the pattern requires active target management until price gives a factual reversal (even if it reverses 1 pip away from X-point). That's why cypher usually gives you inverted risk to reward (first target)
Also very important that you take some profits at 0.382CD, not only breakeven the trades. If take some profits at 38.2 then the accuracy of cypher is 70-75%. Doing so you can trade large portfolios of 15-20 pairs. In this case your largest drawdown will not be very big (not more than 6 losers in a row according to my research). But if you only take the target of 61,8 then the accuracy of the pattterns lowers all the way down to 55%. Trading large protfolio in this case is not recommended unless you can withstand large drawdowns (up to 12 losers in a row according to my research)
I don't want you to rely on my words only and do a research of cyphers on your own. If you do it, hopefully you will realize that knowing the ratios only is NOT enough for succesful trading of the pattern.
Don't be timid to contact me in Private Messages if you have some questions about the reseach work.
+1 Reply
TomHall TOP Alexander_Nikitin
6 months ago
If you are using the fibs above, then the D leg will always exceed the B point.
Yes i agree there are other criteria that can be implemented, traders should always do their due diligence prior entering the markets.
+1 Reply
Alexander_Nikitin TOP TomHall
6 months ago
If you have your B exceeding 61.8 and C-point exceeding 1.414 then D-point will hardly exceed B.
+1 Reply
TomHall TOP Alexander_Nikitin
6 months ago
For me personally, if the setup has less than a 1:1 risk reward ( minus discretion ) then the trade would not be placed.
If the D leg completion is parallel or above the B leg then i personally wouldn't take the trade.
Reply
Alexander_Nikitin TOP TomHall
6 months ago
Cypher is not something personal. If it is personal then it is not a cypher. Call it "personal pattern".
Here's the situation I talked about
snapshot
Reply
TomHall TOP Alexander_Nikitin
6 months ago
I think you misinterpret what i mean my 'personally'.
Just because i wouldn't 'personally' take the trade does not mean it is incorrect.
Reply
Alexander_Nikitin TOP TomHall
6 months ago
If you will not take a trade this means you will not have the right probabilities. How do you know that filtering trades this way you will still have a positive expectancy? Your approach may easily filter all the winners leaving you only losers))
Reply
TomHall TOP Alexander_Nikitin
6 months ago
I know what my expectancy is which i have backtested and calculated.

I have also attached my verified results for you below.
http://www.myfxbook.com/members/uk_forex_signals/uk-forex-signals/1384985
Reply
Alexander_Nikitin TOP Alexander_Nikitin
6 months ago
By the way. Cypher XA is not necesserily an impulse. It can also be an anchor leg. Usually impulse is understood as a violation of previous Highs/Lows. Your definition of "A bullish impulse leg is a strong move in price action to the upside." Is not correct.
+1 Reply
TomHall TOP Alexander_Nikitin
6 months ago
I did not post think information to get into a debate with yourself.
If you are a successful trader and you trade this pattern different then that is great.
Everyday i prove my profitability from these setups, i have not indicated that this is the only way to identify the setup.
Reply
TomHall TOP Alexander_Nikitin
6 months ago
Please note my disclaimer below that was posted along side the information.

DISCLAIMER:
Please note I am only providing my own trading information for your benefit and insight to my trading techniques, you should do your own due diligence and not take this information as a trade signal.
Reply
Alexander_Nikitin TOP TomHall
6 months ago
Ok. Let's put it this way. The founder of the cypher is Darren Oglsebee. You are making some money (I hope you are making) using his strategy without even saying "thank you" to him. No credits, acknowledgements.... But that is not a problem. The problem is that you are explaining (teaching) the pattern to others wrong way. If somebody fails using the pattern (of course on his own risk) he will not blame you but the Cypher pattern itself. He may tell others: "Cypher is complete bullshit. Those who teach you that this pattern is good are liers." Will Tradeempowered reputation grow after the army of these "cypher failure traders" appears?
What I would like to see in this post is that you show some respect to the founder of Cypher explaining the pattern correct way. This means explain the way Darren, Akil and Jason trade it, but not the way you personally trade it. If you found your own way to trade it then it is your own strategy. Call it somehow else but not Cypher.
See what I mean?
+1 Reply
TomHall TOP Alexander_Nikitin
6 months ago
First thing first, i think you should check some recent information that was published, this is not the platform to get into it but please do some checks before commenting on post's.
I am more than happy to give credit to anyone, i will take no credit at all.
Secondly, are you even aware of where i have had my information from?
Third, i posted my verified results above showing that i profit with my setups, i am not saying that this is the only way to trade.

If you want to get into the details on a private message then i am more than happy to do so.
Reply
Alexander_Nikitin TOP TomHall
6 months ago
#1. Didn't understand what you mean by this sentence. What information posted but not in this platform you are talking about?
#2. Even if you are taught by Tradeempowered this doesn't mean you explain the Cypher correct.
#3. Even if you have food results this doesn't mean you trade Cypher.
Reply
TomHall TOP Alexander_Nikitin
6 months ago
I have never been taught or have any affiliation with TE.
I verify my results to show i practice what i preach, can you do the same?
Like i say i am not here to defend my strategy's, simply to help new traders.
Reply
Nico.Muselle MOD TomHall
6 months ago
Guys, this is a very interesting discussion but I will have to ask both of you to stop it here before it gets out of hand. As far as the validity of the Cypher Pattern is concerned, Alexander_Nikitin is right, if D does not exceed B, then we do not have a valid Cypher Pattern as intended by Darren Oglesbee. However, if Tom backtested, the "failed" cypher patterns and they work for him, then he is absolutely free to trade them that way.
As far as the targets is concerned, there is some advice on what targets to take, namely the 38.2 and 61.8% retracements of the pattern. How you decided your targets (entry on the 78.6% retracement and exact retracement from there) or wait till you see the reversal and use that as the length of the move is a personal decision. Whatever you backtest and works best for you is valid.

That is the beauty of this platform, we can share ideas on how to trade, best practices (from our own experience) but there is no "one right way" to trade ... A pattern is indeed defined by some rules, if you want to interpret them differently, that's totally up to you, whatever works. And that should also be the message to the people reading this post. If you want to trade a certain setup, test it and see if and how it can work for you.
Peace !
+5 Reply
TomHall TOP Nico.Muselle
6 months ago
Couldn't agree more, have a great day.
+1 Reply
saif12 PRO TomHall
6 months ago
Hello There, I do not know your name, but will call you what you called yourself Tomhall. You are great by all means, and your efforts are greatly appreciated. Others should be thankful that there is someone out there sharing their thoughts, instead of arguing for the sake of arguing.
Keep the good spirit, and do not pay attention to such words. :)
+3 Reply
TomHall TOP saif12
6 months ago
Hi,

Thanks very much, appreciate the message.
Reply
Tiberious Alexander_Nikitin
6 months ago
Dude, you yourself are instructing people to do it differently to Jason and the trade empowered team. If the wick exceeds 1414 the pattern is invalid. Your research may indicate otherwise; but then that's your way of trading it, personal to you.
Reply
Alexander_Nikitin TOP Tiberious
6 months ago
Well, before arguing you'd better contact Tradeempowered. Price should not close above 1,414 but the wick may extend to whatever level.
+1 Reply
TomHall TOP Tiberious
6 months ago
I have no connections with with company below, however i do have the same rules.
Price can exceed the 1.414% but cannot close above/below.
They are some rules that you should backtest and see what outcome you feel is more profitable.
+1 Reply
Tiberious
6 months ago
Cheers for the chart Tom!
Reply
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