Strategy Based On Chart Pattern

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fatdog1
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Postby fatdog1 » Mon Jun 26, 2006 5:32 am

TheRumpledOne wrote:Looks like the accumulation/distribution cycle to me.

A rose is a rose...:lol:


That is exactly what it is. A simple explaination for it.
When the cycle runs as it is suppose to run.
It is also possible to have a pause in a uptrend if the top area turns out to be a basing area instead because the up move continues, 212 instead of 234 or a pause in a downtrend if the basing area turns out to be a top area. 434 instead of 412.

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Postby fatdog1 » Mon Jun 26, 2006 10:01 am

The EURO broke out of the top of the trading range and now it is selling off
after entering the breakdown area from last Friday morning.
It should bounce near the bottom of the range where the breakout happened.
I am updating charts this morning and I am behind.



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Postby fatdog1 » Mon Jun 26, 2006 11:04 pm

fatdog1 wrote:Ali,
I am updating the smaller time frame RIMM chart.

There are 2 possible trades working.

For a long trade there is a bull flag pole below the congestion area which would make it a stage 1 basing area if we move higher from here.
It could just be a pause in the current little up trend on the smaller time frame. A breakout of the top line is a new stage 2 uptrend on this chart.

There is also a possible stage 3 top on the 10 minute chart because of a key reversal bear flag candle inside the congestion area.

The modified DarvasBox would have a bear flag pole and a congestion area working if there is a selloff from here.

The Weinstein strategy (if it is possible to code one) would take the breakdown trade at about the same price on a break below the bottom
line of the trading range. I should add that since we don't know if this is a stage 1 basing area or a stage 3 top area, a Weinstein strategy should also be ready to enter a breakout from the top into a 212 long breakout trade. The DarvasBox is coded to do this already.

Let's see how it plays out next week.

I'll attach the workspace with the trendlines on it. Version 3159





Here is a RIMM 10 minute chart screenshot showing the outcome of the breakout from consolidation today.
The breakout was to the top today.
So the breakout on RIMM is a continuation of the uptrend, or a bull flag breakout, or a Stan Weinstein stage 212 breakout.
It is sitting on the breakout line.

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Postby fatdog1 » Mon Jun 26, 2006 11:18 pm

fatdog1 wrote:The EURO broke out of the top of the trading range and now it is selling off
after entering the breakdown area from last Friday morning.
It should bounce near the bottom of the range where the breakout happened.
I am updating charts this morning and I am behind.




As far as the EURO goes, It went from a stage 4 downtrend on Friday into a stage 1 basing area on Friday afternoon thru Sunday and a new stage 2 uptrend early today when it broke the top of the trading range which is the 412 normal cycle.

It then sold off to the breakout point and then moved back up to make a new high later in the day.

This was the type of breakout long trade I was looking for last week when the area at 1.2573 was still support.

I guess I did not notice the bull flag pole on the EURUSD that formed on Friday. Whatever the low price was on Friday, it was near enough to the 1.2460 area of support to produced the bull flag pole or key reversal candle.

Another reason for a automated bull flag breakout strategy, lol.
Watching paint dry for 2-3 days.


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Postby fatdog1 » Tue Jun 27, 2006 6:46 am

fatdog1 wrote:
fatdog1 wrote:The EURO broke out of the top of the trading range and now it is selling off
after entering the breakdown area from last Friday morning.
It should bounce near the bottom of the range where the breakout happened.
I am updating charts this morning and I am behind.




As far as the EURO goes, It went from a stage 4 downtrend on Friday into a stage 1 basing area on Friday afternoon thru Sunday and a new stage 2 uptrend early today when it broke the top of the trading range which is the 412 normal cycle.

It then sold off to the breakout point and then moved back up to make a new high later in the day.

This was the type of breakout long trade I was looking for last week when the area at 1.2573 was still support.

I guess I did not notice the bull flag pole on the EURUSD that formed on Friday. Whatever the low price was on Friday, it was near enough to the 1.2460 area of support to produced the bull flag pole or key reversal candle.

Another reason for a automated bull flag breakout strategy, lol.
Watching paint dry for 2-3 days.






This is very interesting.

This is the GBPUSD 60 minute chart from this morning.
It has the same setup that the EURUSD had from last Friday to yesterday.

It had the breakout to the upside from a stage 1 basing area yesterday morning and it is now having the third pullback to the breakout area this morning. The EURO only had the one pullback.

The breakdown line from last Friday is 1.8262 and it must be stronger resistance which may be why we are having the so many pullbacks since the high today was 1.8258.

The EURO moved quite a bit more than the POUND after it broke out but the weakness in the POUND could mean it will also pull back.

[/quote]
Last edited by fatdog1 on Tue Jun 27, 2006 9:28 am, edited 3 times in total.

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Postby fatdog1 » Tue Jun 27, 2006 7:34 am

This looks like a breakdown and the third pullback on the 10 minute chart working on the EURUSD.

TRO, what is the tunnel all about and can it be altered to plot a top and bottom once the EURO stops going vertical and begins to go horizontal?


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Postby fatdog1 » Tue Jun 27, 2006 8:08 am

fatdog1 wrote:This looks like a breakdown and the third pullback on the 10 minute chart working on the EURUSD.

TRO, what is the tunnel all about and can it be altered to plot a top and bottom once the EURO stops going vertical and begins to go horizontal?



Let's add in a stronger than expected IFO news announcement to the pullbacks and see what happens:


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Postby fatdog1 » Tue Jun 27, 2006 8:23 am

fatdog1 wrote:
fatdog1 wrote:This looks like a breakdown and the third pullback on the 10 minute chart working on the EURUSD.

TRO, what is the tunnel all about and can it be altered to plot a top and bottom once the EURO stops going vertical and begins to go horizontal?



Let's add in a stronger than expected IFO news announcement to the pullbacks and see what happens:



You have to stick with the sellers once the breakdown happens like Mr. Weinstein says.
Like TRO says, they keep handing out pips if this was the tunnel.
There has to be a way to put this together.


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Postby fatdog1 » Tue Jun 27, 2006 8:42 am

I went to a bar chart to find the breakout line that is acting as support each time the EURUSD sells off:




And as candles:


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Postby fatdog1 » Tue Jun 27, 2006 9:16 am

Here is a fresh bear flag with a breakdown line at 1.2587.
If 1.2575 gives way as support, the next breakout line is 1.2551.


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