Looking for patterns - page 214
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I am personally happy with everything. Can you tell me about the 1-2-3 pattern?
Let me give it a try, especially since it's already time to talk about signals.
Pattern 1-2-3 is the simplest and very effective reversal signal. In an uptrend point 1 is the upper point, after it starts a consolidation with the lower boundary at 2. Then a pull-up to the point 3 between the points 1 and 2, and - the moment of truth: if the price went up and broke the level of point 1, the pattern "skipped", as Gerasimm said in "Catching the reversal or correction" - read it in the archive, it will be interesting. If the price went down and broke the level of point 2, the signal for reversal took place. Whether the reversal took place or the correction took place is a question of who will win: the reversal signal or the trend's desire to continue.
Again we see the manifestation of the main law, in my opinion, the law of unity and struggle of opposites. The movement along the trend leads to the appearance of signals for its reversal, which, in the end, reverses it, giving rise to a new trend. One entity, destroying the other, generates its opposite, which will later generate the opposite of the first entity (an upward reversal signal).
Here is the current chart:
I do everything on fractals, but not classical ones, but on "curves" with the right wing being 1 bar (minimum indicator lag) and the left wing being arbitrary, set so as to catch weekly trends in this case. Since the chart is hourly and there are 120 hours in a trading week, the minimum left wing here is 119 bars. The big red fractal symbols (right side of the chart) are exactly those fractals, let us call them reversals.
And here's a look at what happens if we set the minimum size of the left wing reversal fractal to 239 (2 weeks down, one week up, which is correct):
We observe the first reversal fractal (point 1 of the 1-2-3 pattern) on the weekly trend, the other signals are gone, thanks to the filter, 239 instead of 119. We'll talk more about filtering.
The little green fractal icons on the right side of the first figure are points 2 of patterns 1-2-3. The lower boundary of the consolidation. The point 3 is defined at the moment when the price breaks through the consolidation zone; it plays a small role - to help taking profit on correction; it is not necessary on reversal.
That is all for now; I may come back.
Let me give it a try, especially since it's already time to talk about signals.
Thanks for the detailed reply, but not everything is clear.
More precisely, it is not clear why it should work.
Thank you for your comprehensive answer, but not everything is clear.
More specifically, it's not clear why it should work.
1-2-3 ?
1-2-3 ?
Can you draw a schematic diagram?
I can't see the points 1-2-3 in the drawings.
Can you draw a schematic diagram?
I can't see the points 1-2-3 in the drawings.
I'm not much of a draftsman. I can, of course...
In the first (top) picture, the big red icon is point 1, the little green one after it is point 2. Point 3 is between them, but is not shown. Further, it is a breakthrough of either level 1 (signal cancellation) or level 2 (reversal).
I'm not much of a draftsman. I can, of course...
In the first (top) picture, the big red icon is point 1, the little green one after it is point 2. Point 3 is between them, but is not shown. Further it is either break of level 1 (signal cancellation) or of level 2 (reversal).
There are 6 big red ones on the upper picture and one on the lower one. On the upper picture small green 4 pieces, big green many. There are no small green ones on the bottom one.
Maybe the big red one on the top one is the leftmost one or the third one from left to right)))))
I'm not much of a draftsman. I can, of course...
In the first (top) picture, the big red icon is point 1, the little green one after it is point 2. Point 3 is between them, but is not shown. Further on, there is a breakdown of either level 1 (signal cancellation) or level 2 (reversal).
I find it difficult to see points 1-2-3 on your drawings
I will try to draw mine, is this correct?
We are at point 3
I find it difficult to see the points 1-2-3 in your drawings
I'll try to draw mine, is that right?
We are at point 3
You have drawn everything correctly, but point 3 is defined only at the moment of breaking the borders of the pattern.
You have drawn everything correctly, but point 3 is defined only at the moment of breaking the boundaries of the pattern.
And how did you manage to formalise points 1-2 ?