Trading Pattern:
1) 1-2-3 Pattern: After a long trend pattern (either numerous buying
support or selling resistance), there will be one final push to break,
once the steam is gone, the market tends to reverse from that point
and this point is marked as point 1. From here the market will
continue to reverse till it hits a certain point (long reversal is better),
from where the short strong reversal can be seen, this is marked as
point 2. Then once again the short-term reversal from point 2 will
exhaust and the market reverses again from here, this is marked as
point 3. For better understanding, fibo can be marked from point 1
to point 2 as show in the example below, then between 50% and
61.8% once the market reverses, one can enter position. (5min
chart shown in the example)
2) Fakeout pattern: This generally works for long time frame charts
(Eg; 1Hr / day). During a trend/consolidation in market, if the market
breaks support or resistance with double bottom or top, and if the
immediate next candle breaks again the double bottom or top point,
then it is a fake breakout. But this can also be 1-2-3 pattern where
two extreme points after fake breakout can be considered as point 1
and 2, so wait and check whether the market closes above point 1 in
next or further candles. If the candle crosses above point 1, then
mark that point as reversal point and wait for retracement for entry.
Here also there might be a possible of 1-2-3 pattern (Fibo between
point 2 and 3 as shown in fig, for entry point), if market retraces
from point 1 itself while retracement, then enter position with point
1 or below point 1 as SL.
3) Pullback (Trend continuation pattern): Good for long time frame
chart (Above 1hr). It’s similar to Higher-Higher/ Lower-Lower pattern,
so with points marked, make a fibo, the market should retrace to
50% of fibo and should have a proper support near this region, like
between 38.2-61.8%, once the support is confirmed and the market
crosses 50%- or 61.8%-point, one can enter position with strict SL.
4) Triple tap: Good in longer time frame in chart (Above 1hr). Example
considered is Higher-High pattern. Here point 1, 2 and 3 forms
higher high pattern but the difference is not much, it’s almost at
similar level, this shows some weakness, but as you can see in the
figure, the low points of Higher-High pattern (Where support is
formed for multiple consecutive candles) is moving higher with good
difference, so it’s not proper time to enter position. But once the
next lower point (Boxed in figure) forms, and the market reverses
close to previous high and but couldn’t break the high but instead
break down the lower point, it shows the market reversal from this
point. (Here one can also consider like 1-2-3 pattern where point 1 is
considered as last high point. This is just assumption).
5) Morning/Evening star: Good in longer time frame (Above 1day).
Three candle pattern, first candle is strong bullish candle, second
candle is indecision/doji candle, third candle is kind of strong selling
candle. (Usually the previous candles wouldn’t have break the low of
their immediate previous candles, but here the third candle in the
pattern breaks the low of the previous candle). After the third
candle, go to lower time frame like 15min, then wait for flag/wedge
pattern, once it breaks down, enter the position with SL. Even if
missed this entry, wait again once the downfall reaches the
consolidation and enter again once it breaks down.
