Hi All, I wanted to share this with you explaining Cypher Pattern.
On the left are steps required for valid Cypher, and the right Pane is the Stops and Targets
First I will explain the numbers I have noted on the charts, this is a standard procedure I follow
1. Recognized Structure - Potential X to A leg 2. A Leg is now formed 3. B Leg and lets see how far it retraces using the Fibonacci Retrace Tool - we have a potential Cypher is price falls 4. Now we have the criteria for the Cypher 5. At this point I have my 78.6% in place and I know my entry level - D completion - Price still has not hit the entry so orders are resting at that level 6. Stops are immediately placed 7. After entry at 5 - I have my targets on screen ready to be adjusted at D completion - Target 1 Adjusted 8. Target 2 is adjusted when we have the reversal 9. Target 1 Has been hit so we want to move stops down 10. Second Stops is moved down 11. Stop is placed at break even which is our entry level 78.6% - we are now safe and covered on our second target. 12. Second Target achieved
13. This is not on screen but I will also trail stops after we have a Target 1 hit, this will be determined on price action. If we hit the Target 1 level then we come back to retest our entry point. If second Target is not stopped for break even and price falls back towards Target 2, I will wait for a break below close below so LLLC or HHHC depending on bullish or bearish, my trail stop would be 5 pips above the last structure level set to trail.
Based on how price action works and structure levels which we know are key to trading, this action of price generally indicates a drop, and setting the trail to this level protects me with gaining the maximum profits if we just miss the Target 2 and if I am sleeping at the time. How many times would you see Target 1 hit then price falls to just past the 50% then back to stop out for break even.
Trading View has multiple tools to allow you to run very fast analysis and also publish your idea's. Learn to use them to your benefit
The XABCD and CYPHER makes it a lot faster to publish our idea's rather than drawing triangles, it also shows you the ratios on screen so you dont need to draw Fib's - in saying this I always like to double check and its a habit to also have the Fib's on screen with a straight entry line.
Good luck traders and any questions or explanations you want me to publish, send request and I will do my best.
Dont shoot for the moon take profits and dont be greedy because it will turn into more loss than gain.
Why there is different Fibonacci measurement between the Chypher tool and Fibonacci retracement tool? I use Chyper tool to draw a Chyper pattern, and it's fit. But when I use Fibonacci retramenet tool to measure the pattern, there is huge different between 1.41 and 2.0.
claudiogoldfarb
⋅
@Fx46, Hi, I have the same doubt as you. Did you get the answer?
Fx46
⋅
@claudiogoldfarb, Yes. I just realize that Cypher pattern has to be measured from XAB : 0.382-0.618, ABC : 1.13-1.41, and XCD 0.786. While the other measured from X to A to get D, Cypher is unique, it is measure from X to C to get D.
FXKOPPA
⋅
thanks for your informative and explained reply
FXKOPPA
⋅
Hej Oz , could you please give exact entry , sl , target
Oztrade
⋅
Hi Thanks for your reply, I trade Cypher Aggressively because of the win ratio on the pairs I have backtested and forward tested. I use the 78.6% entry level - this is obtained using the Fibonacci Retrace Tool - you take the retrace and start at X and finish at the C leg - this will show you the entry being at the 78.6% - I use stops again based on backtesting and forward testing are at the Fibonacci Extension 1.113% - you will need to add this measurement to your tool if you want to use it to obtain that stop level. This is obtained from the A to X leg, so you will click it on the A leg lowest point and then click on the X leg Highest Point and back down to A leg. This will show you the 1.113% ext above the X leg. Then with Targets after the D has fully completed and we see the price retracing, You will take your Fibonacci Retrace tool from the C leg then up to the D leg and it will show you the 38.2% and 61.8% retrace for targets 1 and targets 2 - remember to place your limit order or target level just above these fibonacci levels to make sure you get your targets filled. I generally place them a few pips above these fibonacci levels. no matter what happens with price action even if the D completion continues to its highest point even if it is just below stopping us out we need to keep adjusting targets until we have obtained Target 1 - hope this helps