Pattern Rocognition Indicator (s) - page 2

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fxisland
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fxisland  

June 1st

After the ZUP identified a Bearish Bat, let's examine the this pair's subsequent price points in relations to the program.

The attached chart has Carney's perfect/ideal Bullish Gartley on the left.

I've inserted the swing labels in white and their numerical values between swing points.

Point B was a 50% retracement of X-A. This did not conform to the required .618.

Point C (retracement of A-B) did comply, registering .618.

Point D (retracement of X-A) was .854 which is acceptable by the ZUP. Carney's ideal is .786.

It's retracement from B-C was beyond the required 1.27/1.618.

Therefore the ZUP did not trigger a pattern due to Point B not being in compliance and D' retrace of B-C not being in compliance.

I assume that some pattern traders may trade this (on a BUY of course) based on Point B being a fib ratio.

As a footnote, we can see the downward action to Point B bounce off of the ZUP generated trend line.

fxisland
3839
fxisland  

The ZUP indicator triggered a Bearish Gartley on the 15-min chart of EUR/USD. Point D was reached at the price level of 1.2249.

Examining the attached pic, we can see Carney's ideal distances on the left.

Except for B's retracement of X-A, the distances were not in compliance with Carney's ideal pattern.

The ZUP does display it since the numbers are Fibonacci ratios. Therefore each particular trader needs to make a decision on whether or not o trade a less than ideal pattern.

The SELL signal from this pattern did go on to make 45 gross pips. The end of that downward action halted at the 78.2% retracement fib of C-D.

Note that the ZUP did not display the name of the type of pattern of the upper left hand corner of the chart on this one. It seems to happen on shorter interval charts.

fxisland
3839
fxisland  

Attached 1-Hour chart is a Bullish Butterfly triggered by the ZUP indicator.

Weaknesses:

B, as the retrace X-A was only .740 instead of .786

C, as the retrace of A-B was .854. THis is an acceptable number for the ZUP.

D, as the retrace of B-C thus far is 2.34

- better to wait to see if D drops to the 2.618 fib, which is the lowest horizontal line at bottom of red box. Price there is 1.1928.

Note: The pic used the Heiken Ashi and we can't see the candle wicks.

EDIT: Reconsidered since further drop of D would destroy the requirement of 1.618 for the relationship of D as the expansion of X-A.

Imperfect B causes other points to be imperfect in this one. Let's see what happens.

EDIT2: I believe I have clarified the question I had with Point D. There are 2 relationships.

- D is the extension of X-A and should be 1.27 or 1.618. The actual pull with the fib expansion tool is from A to X.

- Not an ideal pattern, but the best is to see D hit 1.1928 as per above for a BUY signal. Let's see what happens there.

*****Have a good weekend****

fxisland
3839
fxisland  

Attached are the 1-Hour charts of the EUR/USD and the EUR/CAD pairs.

I've noticed when they diverge, instead of moving in the same direction, it may be a signal.

Arrows point to areas of divergence on both the price charts and the Multi-Time Frame RSI indicator. When the EUR/USD is in overbought/oversold, we can enter when it emerges past the 30/70 threshold.

The close of the week shows a clear divergence between the 2 pairs. The EUR/USD is in oversold.

How would we trade this? I'm not familiar with this tpe of trading, so I can only guess.

We can visualize or demo trade:

SELL EUR/CAD and BUY EUR/USD.

- Obviously this looks look a hedge position, except that the pairs are currently in divergence.

- BUY EUR/USD when it reemerges over the 30 MTF RSI level, using EUR/CAD as a leading indicator.

Will be interesting to see what happens next week.

fxisland
3839
fxisland  

Compare the ideal Bullish Bat with the ZUP generated pattern, and learn what the program deems acceptable distances between points.

It also generated trend lines for support and resistance.

We'll, of course, have to use other entry tools at Point D.

fxisland
3839
fxisland  

This one went for about 150 pips.

I plotted the yellow fibs by pulling from B to A.

D's extension of A-B registered 2.14, but if we look closely, the candles closed at 1.618, which is one of the ideal ratios.

I want to understand the ZUP not only because it's a work of art and seriously brilliant programming, but for the advantage it offers as a leading indicator.

Patterns are leading indicators. Most everything else only advises of what happened in the past. This is the view and even close to a direct quote by the pattern gurus.

fxisland
3839
fxisland  

Here's another Bearish Butterfly on the GBP/USD pair that triggered at the same time (15:00 GMT).

Again, I applied the Heiken Ashi Smoothed indicator candles. We can perhaps use this to confirm reaction off of the patterns, as well as use it to stay in the position.

fxisland
3839
fxisland  

Tweezer Top off of the historic 50% price of 1.2132. Indicator "Pattern Alert" registered an alert from 1-Hour chart and entry would be at the open of the 22:00 candle price of 1.2120.

Plotting retrace fibs from:

June 1th 16:00 low of 1.2055

June 13th 21:00 high of 1.2132

23.6% fib = 1.2114

38% fib = 1.2103

50% fib = 1.2098

61.8% fib = 1.2085

Volume/volatility is low as market just opened. No economic data until 11:00 GMT with Euro Zone Industrial Production.

Stop-loss on any SELL trade would of course be tight and above 1.2132 plus spread and cushion.

fxisland
3839
fxisland  

In the indicator thread, notified that the ZUP v86 indicator triggered a Bullish Gartley, although it is a non-conforming (not perfect) pattern.

Attached is the Gartley on the right and a support/resistance chart on the left, using both the retracement fib plot and the Gann_SQ9.

The large spike down on USD/CAD upon open of week, reflects the same volatility with other major pairs. We're guessing this is due to a ratified bailout agreement in the EU as well as scheduled meetings regarding Korea, with China as the intermediary.

We can see the price action on USD/CAD bounce and retraced 38.2% (green). The brown lines are S&R levels of the Gann_SQ9.

2 levels are the same price on both. The Gann 22.5-degree is the same as the 61.8% retrace fib. The 45-degree is the same as the 23.6% fib.

The spike down also triggered the Gartley. Compare the distances with the perfect Gartley, as this one is not. This indicator can repaint. In this case, if pair manages to move lower and still conforms tho indicator's parameters.

Files:
fxisland
3839
fxisland  

Here are 3 pics on GOLD with the ZUP v86 indicator.

1) Oct 19th Gold Weekly chart Bullish Gartley Oct 2008 $735 BUY signal, reaching high of $1425 Nov 7th.

2) Nov 9th Gold 4-Hour Bearish Butterfly. $1393 SELL signal. Dropped to low of $1330 on Nov 16th.

3) Nov 23rd 1-Hour Bearish Gartley $1377 SELL signal. Dropped to low of $1352 on Nov 26th.

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