Probability is the same after a pattern triggers. I give each pattern a 60-65% probability of working, and they will work as long as point D holds. In this case point D can be at the 1.27 as I explained in earlier post. Obviously I did not want to see a re-test of this area, so now that we are here my risk is the same and 24.00 is still my stop so I have defined the risk. This trade can still work eventhough it does not look good. As far as your second question, price action in between these points can get wild and you will find that trades you get out of will end up doing great and the ones you stay with may not do so well, so that is each person's decision. What you can do is move up your stop as price appreciates, but not too quickly because you can get taken out on a pullback before the next move. These patterns give you clear entries and target areas, but it is the area in between that gets us all.
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5 point pattern trading
- Thread starter phillyflipper
- Start date
Probability is the same after a pattern triggers. I give each pattern a 60-65% probability of working, and they will work as long as point D holds. In this case point D can be at the 1.27 as I explained in earlier post. Obviously I did not want to see a re-test of this area, so now that we are here my risk is the same and 24.00 is still my stop so I have defined the risk. This trade can still work eventhough it does not look good. As far as your second question, price action in between these points can get wild and you will find that trades you get out of will end up doing great and the ones you stay with may not do so well, so that is each person's decision. What you can do is move up your stop as price appreciates, but not too quickly because you can get taken out on a pullback before the next move. These patterns give you clear entries and target areas, but it is the area in between that gets us all.
ARJ Arch Chemical Update. We closed below point D on the weekly chart. If you take this short your stop is still 45.00 until it breaks from here then stop can be moved. I do not have a position. We have been following this in real time since the bearish butterfly trigger without the benefit of hindsight
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CMR Morgan Stanley Consumer Index triggered a bullish Gartley pattern on 7/30/07. we need to stay above point D to be bullish for me, but technically this pattern is considered bullish until X is taken out. We need to see some strong retail numbers and a fed cut and this may rock
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$IXF NASDAQ FINACIAL We see 2 bullish butterfly patterns and the newer smaller bullish butterfly is inside the larger bullish butterfly. Also note how we stopped at point D so far on the smaller pattern. The financials are hoping/expecting a rate cut. If D holds here and now, this can go up into the Fed meeting expecting a rate cut and then sell hard if they don't get it or trade sideways until the meeting and react after the fact. To me this smaller pattern is a consoldation of the larger pattern and is a bullish consolidation, but the Fed can change that in a second .
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Quote from phillyflipper:
CAKE CHEESECAKE UPDATE....MY STOP AT 24.00 held for today.
and the 1.27 retracement of XA held. If we can't stay above point D on Monday then I will probably be stopped out at 24.00 .
My entry was 24.91
Stopped out of my CAKE at 23.90 as expected. On to the next one.