FTSEMYX:FBMKLCI   FTSE Bursa Malaysia KLCI Index
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How to trade when you see the Cypher pattern?
While trading the cypher pattern , you will apply a set of simple rules. They will try to minimize risk and maximize profits. Even though there is one more important step to learn before defining the cypher pattern trading strategy rules.

Step 1: Drawing Cypher patterns
Click on the harmonic pattern indicator located on the right-hand side toolbar of the TradingView platform.
Identify the starting point, X, on the chart, which can be any swing low or high point.
Once you’ve located your first swing high/low point, follow the market swing wave movements.
Every swing leg has to be validated and abide by the cypher pattern forex Fibonacci ratios.

Step 2: Trading process
Now that you know how to identify and qualify the harmonic cypher pattern , it’s time to trade the pattern. Standard methods of trading the cypher pattern include:

Entry point
The cypher pattern may be the most exciting harmonic pattern for risk management, because it has the highest winning rate. Backtesting results have continuously proven the cypher pattern forex is a very dependable harmonic pattern .

Next, buy with a market order at the first candle preceding the completion of the D point at 0.786 Fibonacci retracement of the XC leg. Once the market touches the 0.786 level, wave D is in place, because you can’t control how far the market will go.

When the CD leg gets to the 78.6 percent retracement level, the cypher pattern is complete and valid. However, the 78.6 percent Fibonacci retracement level of X to C also acts as the standard entry point for a valid cypher pattern trade.

Take profit
There are some ways to take profit with this pattern, but the standard method is to scale out of your position at the first take profit level and end the trade at the second take profit level. Take profit once you get to point A. To get to such levels, draw a Fibonacci retracement of the CD leg.

The cypher patterns trading method is a reversal method. Make sure you capture as much as possible from the new trend. If you’re not a fan of reversal strategy, and you prefer a trend following strategy, follow the MACD trend following strategy-simple to learn another strategy. The strategy has attracted a lot of interest from the Forex trading community.

Ensure you take profits once you reach point A of the pattern, because it has conservative take profit target.

So, why should you take profit so early?

For the most part of the harmonic patterns , it’s best to lock in profits as soon as possible. Since the cypher pattern is one of the most profitable harmonic patterns , you can give it more room for the price action to breath. You have the chance to at least see a retest of the wave A.

Stop-loss
Ensure you give your trade at least 10 pips space above X in the intraday charts. While trading a bullish cypher pattern, place the stop-loss at least 10 pips lower than the low of X. For a bearish pattern , place the stop-loss at least 10 pips higher than the high of X. That’s the only logical place to hide your stop-loss, because any break below will automatically invalidate the trade.