Alexander_Nikitin
Education

Education post. Part II.

FX:USDCAD   U.S. Dollar / Canadian Dollar
The table above describes all possible pattern variations: harmonic gartleys, advanced gartleys, pesavento gartleys, harmonic bats, advanced bat and UG. If you look closer, the range of ratios covers everything.

Now, let's go into some details...

1) Intro
In this test the patterns were found and drawn by MPS. The algorithm of swing identification was set to "prex(12)". This means I was looking at highest highs of past 12 candles and lowest lows of past 12 candles as swing pivots . The FastBacktest utility automatically wrote down all patterns details including time, entry, stop, target, B ratio, C ratio and more into excel spreadsheet. This methodology of market research eliminates subjectiveity, human errors and it compresses the time. But you can easily verify the results manually (old-school) if you wish.

2) Trade plan
I was testing naked pattern. No reversal confirmations by indicators, priceaction or oscillators. Simple set-and-forget. If it works then it works, if not then not.
Entry: Limit order at 0.786XA (always).
Stop: 1.05XA.
Target: Risk distance calculated and then projected to have 1:1RR ratio.
Result: A pattern was considered a winner if priceaction reverses and hits takeprofit before it hits stoploss.

3) Statistics.
Testing period was 1999-2019. Pair was usdcad . Timeframe was 30M. Total amount of patterns found was 1369. This large number of setups tells me that usdcad spends more time consolidating than other pairs do. Left-top corner number is the probability of win. Right-top corner number is the total number of setups. Left-down corner number is the losses count. Right-down corner number is the wins count.

4) Conclusion.
I think objectivity is the key to any scientific research. Next time, when you read a book, an article, watch a video or attend a pattern trading course ask yourself a question: "Are the results they are talking about really testable, verifiable and repeatable?" Run away from those mentors who don't tell you the swing identification method. Based on my research, different swing identification methods produce different results. If you would ever wish to use this table in your trading make sure that you find swing with prex(12) method. This research is only true for USDCAD , 30M.
In my trading I go with the pattern (standard way) if the cell is green and I go against the pattern (reverse way) if the cell is red. This way I always stay on a higher probabilities side.
Comment: Guys, don't forget to check the related idea "Education post". The link is just below this description. You will get the table for eurusd 30M.
Comment: here's the first educaitonal post for eurusd:
Comment: The table had mistakes. Cells B1C3 and B2C3 now corrected:
This pattern was found by the MPS-v5.5 pattern recognition software: https://mps-trade.com

My YouTube channel: https://www.youtube.com/user/alexniquitos/
Good work! USDCAD seems a better pair than most for this type of trading!
Reply
Nice table, thanks. Personally, I like the one with a 72,5% winning probability most ;-) Statistically, it occured every 3 month within in the backtested time period. Not bad. It's worth the wait. ;-)
+1 Reply
@ReallyMe,Yep, every three months on this pair. every three months on other pair and so on. If your portfolio is 12 pair you will have similar setups every week:)
Reply
ReallyMe Alexander_Nikitin
@Alexander_Nikitin, I see, "cherry-picking", eh? ;-) Very good.
I wonder if there are any substantial differences in probabilities tables on USD/CAD if you change the timeframe from 30m to say 5min, 15min. Then you also look on 30m, 1h, 2h, 3h, 4h, 1d... Of course there will be more or less setups found due to smaller or larger timeframes But will the probabilities in the table remain roughly the same, regardless of the timeframe?
+2 Reply
corleone7 ReallyMe
@ReallyMe, they wont, hence the need to test multiple TF
Reply
@ReallyMe, different timeframes produces different results. so, they won't be roughly the same.
+1 Reply
ReallyMe Alexander_Nikitin
@Alexander_Nikitin, Ok I understand. The trick is thus to play the right ratios in the right time frame, selecting a combination that possesses a high profit probability. Thanks for sharing your results!
+1 Reply
@ReallyMe, you are welcome. just posted part III.
Reply
can you explain how do I read the table. What is B ratio and C ratio lines ?
Reply
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