The pattern is a relatively new trading pattern that was discovered in 2011 by Scott Carney. The pattern is somewhat similar to the identified by the overextended swing/pivot point C. The pattern is identified as shown in the picture below and uses 0, X, A, B, C swing points to name the pivot/swing legs and is referred to as a pattern.
The main differentiating factor between the and other patterns is that it relies on the 88.6% and the 113% reciprocal ratios. Once the price point at D is formed, prices rally or decline very swiftly and therefore it requires active management of the trade. In other words, you simply cannot set up the pattern and come back a while later to trade it as by that time price would have moved a significant distance.
The pattern has the following ratios.
AB leg extends OX leg between 113% – 161.8%
BC leg extends beyond O by 113% of the OX leg
BC leg is also an extension of AX by 161.8% – 224%
Unlike other , the trades are entered as follows:
Entry is at 88.6% of OX leg with stops coming in at point C
Targets can be 61.8% of BC