Double Top or Bottom
"double top" distribution/15 min Pattern recognitionTraining/reference*
Hard to show here, but overall trend is down.
Characteristics and points of confluence:
Down trend (on 1 and 4 hour)
High volume weakness/supply at higher prices into 50-61.8% retrace
Upthrust/ Fake break above resistance on high volume
diminished volume/demand at support (neckline, EMA test)
Note:
Lazy bear colored volume bars box numeric setting
color inversion: red to green (strength)
Green to red (weakness)
15 minute used here but 5 minute conveys greater detail.
ADAUSDT - the DragonThe Dragon pattern is similar to the ‘W’ pattern or the ‘Double Bottom’ pattern with a few different trading rules and targets. Inverse Dragon patterns are similar to ‘M’ pattern. Dragon patterns usually form at market bottoms. Dragon patterns work in all timeframes and in all market instruments. Like most ‘Double Bottom’ patterns, Dragon patterns present excellent trading opportunities with low risk to reward ratios. The Dragon pattern starts with a ‘Head’ formation and price declines from the head level to form two legs of the Dragon. These two legs usually form within 5% to 10% of the price difference.
The second leg has a strong indication of reversal as it posts a key reversal bar or a divergence in
any oscillator indicators. A spike in volume usually follows the price rise of the second leg. A trend line is drawn connecting the head of the Dragon to the hump. When price closes above the trend line and is confirmed by price action or divergence in any oscillator, it signals a reversal.
The second confirmation of the Dragon pattern occurs when the price closes above the hump, which is 38% to 50% of the range or the Swing High/Low between the two Dragon legs (or peaks for Inverse Dragon) from head to the low of the first leg.
Anatomy of a Dragon Pattern
A. Head of the Dragon
B. Formation of first leg
C. Hump (must be 0.38 to 0.5 of AB)
D. Second leg (can be 0.618 to 1.27 of
AB)
E. Trend line breakout (Long Trigger)
F. First target at 1.27 of CD
G. Second target at 0.886 to 1.0 of BC
H. Third target at 1.38 of AB
I. STOP: Place a stop few ticks below
the lowest low of two legs.
My favorite kind of top (and bottom)Screenshots will be better than words:
I only trade tops & bottoms (accumulation & distribution, supply & demand), and I select good ones.
The "rectangle" type is my favorite.
"Continuation flag" they said. I always go opposite.
Use other filters, the price action pattern is just here to pull the trigger. Use stop losses.
This is NOT a double bottomWe often take a double bottom to be a sign of a bullish market structure.
A double bottom with a breakout ends up looking like a 'W'.
However, it's NOT double bottom when the second low is LOWER than the first low.
The second leg must be EQUAL or SLIGHTLY GREATER than the first low, for it to be considered a valid 'W'.
Why? Well, the second leg of the double bottom is just a test of the first initial lows.
If we break those old lows, we haven't really established a bottom.
I can see how taking this trade may have been tempting; it's pretty damn close to a 'W'.
But not quite, and it's evident what happened shortly afterwards.
Why I avoid using trendlineThis is one of some analysis that I was shared to my students on the group.
Based my experienced, I NEVER BELIEVE analysis using trend line ( diagonal line ) will give me high accuracy !!!
And this is the evidence, AUDNZD after price breakout the top diagonal orange line, the trendline trader , I am pretty sure most of them thinking price will continue up and open buy position. But it just trap! False breakout !!!
Me and my students together we opened SELL position, and let profit running until touch last yellow horizontal line
NZDUSD BULLISH ANALYSIS D1This is for educational purposes only.
Here's an alternative to the weekly analysis I posted - it could go either way.
Feel free to comment
DXY - Weekly - Multi-Timeframe Analysis Series 1Continuing with another episode of Multi-Timeframe Analysis Series 1, I'd like to break down the DXY.
The DXY being weighted as follows:
EUR - 57.6%
JPY - 13.6 %
GBP - 11.9%
CAD - 9.1%
SEK - 4.2%
CHF - 3.6%
As you may imagine, there's a lot more interest in using the DXY for a correlation / confluence tool when trading the EURUSD. The EURO equates to over half of the overall weight of the index, meaning there's a majority interest in the EUR vs USD.
We can use this to our advantage, alongside the USDOLLAR INDEX, to add positive or negative trade factors when considering positions across USD pairs and commodities.
Comments
Looking at the Weekly timeframe gives us a different picture to that on the Monthly. We a low-test candle printing into the 20/50 EMA wave, this indicates a possible continuation to the near-term levels of 97.40 region. If we did see this push to the upside, it's change the formation on the current Monthly candle (and potentially the overall outlook shared within the Monthly breakdown). Thinking in terms of the longer time horizon, if we see a break of 97.80 I think it's possible to reach the realms of 100.
Key Note
The Weekly and Monthly are conflicting, which can often be a sign of the overall bias changing from beneath the surface. The smaller timeframes turn quicker, and when they align, this can change the direction gradually on the higher timeframes.
DXY - Monthly - Multi-Timeframe Analysis Series 1Continuing with another episode of Multi-Timeframe Analysis Series 1, I'd like to break down the DXY.
The DXY being weighted as follows:
EUR - 57.6%
JPY - 13.6 %
GBP - 11.9%
CAD - 9.1%
SEK - 4.2%
CHF - 3.6%
As you may imagine, there's a lot more interest in using the DXY for a correlation / confluence tool when trading the EURUSD. The EURO equates to over half of the overall weight of the index, meaning there's a majority interest in the EUR vs USD.
We can use this to our advantage, alongside the USDOLLAR INDEX, to add positive or negative trade factors when considering positions across USD pairs and commodities.
Comments
Looking at the Monthly timeframe we appear to be stalling between the 61.8% retracement of A>B as indicated on the chart. Price is showing high test candles at this level, as well as a potential rolling double top (continuation formation). Given the circumstances of this in its current form, 94.00 could easily be on the cards as we move into the second quarter of 2019.
Key Note
At time of writing this, it's the current monthly candle cannot be considered an indication of direction just yet as it hasn't fully formed (being the 24th of the month).
Estudo dos candles no IRBR3Primeiro vou dizer que essa é uma análise pós fato. Isso significa que quando fazemos uma análise após o movimento acontecer no mercado ficamos com aquela sensação de “nossa como era óbvio, como eu não notei antes”.
No entanto, muitas vezes por nossas próprias expectativas de como o mercado vai andar no futuro acabamos não dando a relevância adequada aos sinais que muitas vezes estão se esfregando na nossa cara. E esse é um dos casos. Acabei nem reparando os sinais que se tivesse seguido teria dado um retorno muito bom.
Marquei eles, nos pontos A, B e C e vou explicar um a um. O ponto D é uma previsão.
PONTO A: O Candle central circulado que aparece exatamente em cima de uma zona de suporte (marcada por uma linha preta) é um exemplo clássico de martelo. O candle antecipa todo forte movimento que vem a seguir e foi um ótimo sinal de compra. Na prática, um martelo verde (no qual o dia fecha no positivo) tem mais relevância que um martelo vermelho, mas mesmo assim valeria uma aposta. Lembrando que um martelo é um dos Candles mais importantes de reversão altista.
PONTO B: São 3 Candles em uma sequência muito interessante, e que aparecem no topo de todo o movimento.
O primeiro candle verde com o segundo candle formam em conjunto um Harami baixista. O segundo candle sozinho é uma estrela cadente, (shooting star), também um sinal baixista. Por fim o terceiro candle é um enforcado. Outro sinal de reversão baixista muito significativo. O corpo dela deveria ser um pouco menor para ser um exemplo de livro, mas paciência.
Então temos 3 sinais significativos de reversão baixista no topo do movimento... é quase como pegar um megafone e gritar “CUIDADO MADEIRA!!!”
PONTO C – O candle central circulado é outro martelo clássico dos livros, bem em cima do suporte. E o que acontece no dia seguinte? O IRBR3 fecha com quase 6% de ganho em 1 dia.
PONTO D – No ponto ou zona D é o local onde eu iria procurar por outros sinais de reversão baixista. O que me faz pensar isso? Primeiro, é um zona de resistência forte, já que reverteu previamente o movimento. Segundo o IRBR3 saiu de seu canal de tendência no qual estava há mais de um ano. Terceiro, o papel está subindo desde seu IPO e esse pode ser o local no qual vamos ver um topo duplo e uma reversão pelo menos temporária do movimento de alta. Está na hora da IRBR3 tomar um pouco de fôlego antes de voltar a subir.
BTCUSD H1/D1 charts (3/8/2019)Good morning, traders. Price continues to press upward in spite of the overhead supply. Because this is happening within sideways movement there isn't much to say today other than the weekend is upon us and we usually see a strong move during that time, so traders should be keeping that in mind regardless of the direction of their trade.
The H1 chart shows an Adam and Eve double bottom pattern that forms the local TR. Price is printing a slightly ascending channel as it consolidates toward the $3900/$3940 resistance level. RSI continues to print a descending broadening wedge and MACD completed a bullish crossover earlier this morning and is pulling away from the signal line. The targets remain the same with the expectation of a move up to $4134, at least, based on the height of the double bottom pattern and local TR. Traders should be keeping an eye on volume and price action as price pushes through $3950 and $4000 to get a better idea of how price will react as it nears the target. As mentioned previously, the target has the potential to print a cup, followed by a handle, which would then have price targeting $4700+.
D1 chart shows two previous days of doji candles printing slightly higher followed by today's candle which is much more significantly bullish at this time. However, there is still more than 1/3 of the day left in the candle and we need to see the expected follow through. MACD is about to cross bullishly.
Be sure to refer to my previous analysis for other possible targets. Yesterday's D3 candle completed strongly bullish and engulfing the previous D3 candle while closing above the 21 EMA and pivot. The weekly candle is looking good at this time as well. Price continues to hold above the 50% level of the December move up, which is bullish. As we discussed a month ago, weekly price is finding itself consolidating between the 200 MA on the bottom and 200 EMA on the top. A close above $4100 would put price above that 200 EMA resistance level. A close below $3885, however, would put price below the 200 MA support level.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
FB: Buybacks Buoy Stock but Privacy Issues Remain a ProblemFacebook, having been pressured by the European authorities for numerous privacy violations and illegal use of its customers’ personal information, is trying to mitigate the risk of criminal charges as well as monopoly charges. Mark Zuckerberg has announced that FB is concerned with the privacy of its customers. He claims, without any details or explanations, that the platform will be more focused on privacy. He is also making some features specific to certain modes of communication.
All of this will impact FB’s stock price. Currently FB has some buybacks in play this year. The intermediate term bottom formation is not completed, and volume is very low. The Institutional Holdings Percentage has declined and even with the recent gap up, the stock has plenty of work to do to create strong momentum energy to move it up further. The changes FB is making may or may not make its customer base happy. That remains to be seen. It also is likely to impact revenues growth.
Weekly Predictions (Feb 18 - 22)- Price is oversold on the Stochastic Oscillator
- Price reversed at recent low
- Might form a double bottom
Weekly Predictions (Feb 18 - 22)- Price neither oversold nor overbought
- Recent consolidation above EMA (25, close), price was unable to break on the downside
- Price is now at recent highs, could form a double top or break above zone
- Price would need to close above zone on the daily or 4-hr chart
DOUBLE BOTTOM Video AnalysisLet me know what you guys think and comment below if you would like for me to analyse my ideas in video format !
GOOD LUCK
Bitcoin Long Term CycleIndicators are more powerful when looking on the weekly or monthly.
If we look at the 2014 cycle, I think we are around the same point today when it bottomed.
As in my previous ideas on BTC, I expect a retest of 200 weekly EMA soon that could bring down price to 3200 or 3000 $, making a double bottom and starting a new cycle for the bulls.
Good luck guys.
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Double bottom and Double topThe Double Bottom Reversal is a bullish reversal pattern typically found on bar charts, line charts, and candlestick charts. As its name implies, the pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in-between.
It is important to remember that the Double Bottom Reversal is an intermediate to long-term reversal pattern that will not form in a few days. Even though formation in a few weeks is possible, it is preferable to have at least 4 weeks between lows. Bottoms usually take longer than tops to form and patience can often be a virtue. Give the pattern time to develop and look for the proper clues
Double top is a chart pattern, characterized by two consecutive peaks in price, that signals a potential bearish reversal of an uptrend.
The double top chart pattern is considered to be an indicator of an intermediate- or long-term reversal in price. After two attempts by bulls to push the price above key resistance levels, many bulls may capitulate and bears often take control over the market price.
The Famous Risk/Reward Myth If you have been trading or interested in trading for some time, I am sure you have heard some online "teachers" say that you MUST have a 1:3 or 1:5 R/R in order to be profitable.. That is absolutely FALSE! If you hear a "professional trader" say that, odds are they are not truly a trader.. A professional trader understands that R/R & win % are correlated. The higher the R/R, the lower the win %, The lower the R/R, the higher the win %.. Determining an appropriate R/R should be decided based on your strategies performance (derived from backtesting different targets/stop losses) as well as your psychology. In other words, R/R and win % should be viewed as one metric, as they MUST work together in order for you to be a consistently profitable trader. As for the psychology aspect- are you a trader who can lose 70 out of 100 trades so long as your making money? I personally prefer to win 60-70% of my trades but that decision is up to you. The important thing is that you balance these two metrics to ensure profitability while catering to your psychology to maintain confidence in your strategy. There is no right or wrong in trading, only what works and what doesn't! If you are not sure what Risk/Reward or Win % is, please see below-
Win %
Win/Loss Ratio also referred to as Profit/Loss Ratio
What Is Risk/Reward?
Risk/Reward is a used by traders to determine how much capital they are willing to risk in order to make a desired reward. For Example- lets pretend you are using a trading strategy that has a 1:1 R/R & you are risking $10 on each trade. A 1:1 R/R would mean that you are risking $10 to potentially make $10. Using this same example with a 1:2 R/R, You are risking $10 to potentially make $20. For a 1:3 R/R, You are risking $10 to potentially make $30 and so on. In order to successfully make a profit with a 1:2 R/R, the market has to move twice as far to hit profit targets than it does to hit your stop loss. In order to successfully make a profit with a 1:3 R/R the market has to move three times as far to hit your profit targets than it does to hit your stop loss & so on.. By default, the further price has to move to hit your profit target, the less likely it is for the trade to be successful, ultimately lowering your win %. With that said, it is important to note that a lower win % does not necessarily mean the strategy is more or less profitable than a strategy with a higher win %. Lets look at some examples below:
Example 1- You are using a strategy that has 1:3 R/R and a 30% win %.. In this example we are going to look at 100 hypothetically trades.
70 losing trades at $10 each (70 x $10 = -$700)
30 winning trades at $30 each (30 x $30 = $900)
Net Profit/Loss = $200
Example 2- You are using a strategy that has a 1:1 R/R and a 60% win %.. Again based on 100 hypothetical trades.
40 losing trades at $10 each (40 x $10 = -$400)
60 winning trades at $10 each (60 x $10 = $600)
Net Profit/Loss = $200
Looking at the examples above, we can see that both strategies made the same amount of money even though one strategy wins 30% of trades, while the other wins 60% of trades! Of course there are small variations to the examples above as not every strategy with a 1:3 or 1:1 R/R will have a 30 or 60% win/loss ratio however the overall concept stands and should be taken into consideration whenever developing or trading ANY strategy.
In my last tutorial- " Simple Patterns Tutorial, The Correct Way To Trade Double Tops " I asked you all to vote on which double top you thought would perform the best out of the 3 common double top formations shown above.. Each top received votes however, top # 2 received the most votes. The answer to this question may have surprised you however, it will be highly beneficial to your trading!
As always I hope this was helpful, the information shared in this educational post regarding risk/reward is an extremely CRUCIAL aspect of risk management and remaining consistently profitable so be sure to read over everything multiple times if need be. Please give this a thumbs up if it was helpful and you would like me to post more material regarding risk management. Also feel free to comment below or message me with any questions you may have.
If you would like access to a free position size and risk calculator that I personally use myself, please use the link below to request yours
goo.gl OR Visit tradersnsights.com/calculators-tools
