DE30 (DAX) Sell 9535 @ 94
Stop @ 9770 TGT 9200 – 8900 – 8500
DE30 is showing formation of AB = CD where point C has
retraced by 61.8% of AB. Where point A at 10043 to point B at 8903 w, retraced
by 61.8% at 9600 and is showing the sign of reversal. If we consider (1:1)
movement then point D must teste minimum of 8500 level where the 100% expansion
theory will be completed. If we consider 127% of AB then we may get the level
of 8150 on lower side. If the theory holds true and fails to trade beyond 71.6%
which comes to 9720 then we can wait for lower target as per the theory.
The
Principle is that AB is the impulsive wave in the market, BC is the retracement
of AB and will usually be a 61.8% (.618) retracement of AB but should not
exceed a 78.6% (.718) retracement of AB. If it exceeds 78.6% te AB = BC pattern
is negated. CD will then be the next wave and be equal to AB (1:1) or be a 1.27
or 1.618 extension of AB. So when trading, you look for the chart patterns
which have performed the ABC formation and plot exit point D which will be
equal to AB of be a 1.27 or 1.618 extension of AB.
What Is an ABCD Pattern?
Reflects
the common, rhythmic style in which the market moves. A visual, geometric
price/time pattern comprised of three consecutive price swings, or trends—it
looks like a lightning bolt on price chart. A
leading indicator that helps determine approximately where and when to enter
and exit a trade. Why Is the ABCD Pattern Important?
Helps identify trading
opportunities in any market (forex, stocks, futures, etc.), on any time frame
(intraday, swing, position) and in any market condition (bullish, bearish, or
range-bound markets). All other patterns are based on (include) the ABCD
pattern. Highest-probability trade entry is at completion of the pattern (point
D). Helps to determine the risk/reward prior to placing a trade. Convergence of
several patterns—within the same time frame, or across multiple time
frames--provides a stronger trade signal.
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