because as you can see in the chart above, most bat/crab/butterfly and so on are not statistically very accurate in the SPOT FX market; i'll even dare say a lot of it is coincidental, and that's not a very good probabilistic approach in my book. i used to use them and stopped to develop my own studies and approach that work way better. that is to say, when a butterfly pattern is invalidated, my approach allows me to already be in the trade in the right direction. so i don't need to worry about these patterns and that is why i call it 'hogwash'.
Please do, because many people posts bats that are not valid. The C retracement can not retrace so high so that it touch the 0.886 retracement. Many people on here post then where its almost is just a double top =D
I only trade the way i learnt in a course with professional traders ... The B to C move Once our (AB) we can now look for a valid (C) leg . The market creates a Valid (C) leg by completing at leaste a 38.2 retracement of the A to B leg .The leg is considered valid as long as price action does not move beyond the (A) leg ...
If its giving a profitable outcome its great, i´m actually interested in the completion rate of target 1 with these ratios. My rules or not mine but the one i learned and find in different books to be the "perfect" pattern is that it must touch the 0.618 and it can come past the 0.786 but not touch the 0.886 - If your C retracement is so high your entry level will be high too, or do you just enter on an 0.886 from X - A?
I would be looking for price to cross back above pivot low and target the top green supply box - that is the origin of this initial leg down. The demand area is roughly 33 pips deep and the target is to the first green zone bottom 150 pips and the second green supply 340 pips - I like the risk to reward
How exactly is the method behind this, it looks like when there is consolidation you trade these areas, but whats the difference from this to just trade simple Support / Resistance levels? With impulsive corrective legs?
When I first started learning this method I discounted as consolidation - however their is a fair amount to understand or at least to wrap your mind around when using this style - James Powell has the SD page on TV here - several good traders there - they can explain it better then me -