Backtesting my 50% retracement system for Apple stock is a perfect example of how it works.
Drawing my bespoke fib levels from the previous low to the new high gives me my entry point, stop and initial target.
ENTRY 50%
STOP 25%
TP1 100%
Closing (selling) 50% of the initial position at TP1 allows the remaining 50% of the position to be risk free.
There are two...
At Target One of the Daily Triangle 50% of the position is closed.
It would then be logical to assume Price would drop by 50% of the move from Entry.
Price did not drop by 50% and instead began to form a new Triangle pattern.
Dropping to a lower time frame (4H) we can see the process begin to repeat itself.
Targets One and Two for the 4H Triangle are shown below.
Triangles occur during periods of consolidation.
They represent indecision in the market as to whether the overall trend will reverse or continue.
The direction is confirmed by a candle close above or below the boundaries of the triangle.
The Butterfly pattern, is a harmonic pattern discovered by Bryce Gilmore using his Wave trader software program.
The pattern structure was further refined using specific Fibonacci levels by Scott Carney which he outlined in his book 'The Harmonic Trader', published in 1998.
The Butterfly pattern must include an AB=CD pattern to be a valid signal. In general, the...
The Gartley Pattern , is a harmonic pattern discovered by H M Gartley and outlined in his book 'Profits in the Stock market', published in 1935.
The pattern was further defined using specific Fibonacci levels by Scott Carney which he outlined in his book 'The Harmonic Trader', published in 1998.
The pattern incorporates the 78.6% retracement of XA, as the...
The Bat Pattern, is a precise harmonic pattern discovered by Scott Carney in 2001
The pattern incorporates the 0.886XA retracement, as the defining element in the Potential Reversal Zone (PRZ).
The B point retracement must be less than a 0.618, preferably a 0.50 or 0.382 of the XA leg. The Bat utilizes a minimum 1.618BC projection.
In addition, the AB=CD...
