A proprietary pattern I have discovered and named JANUS suggests a top at 14.50790 today. The Janus is one of several proprietary patterns I have discovered and use as adjuncts to my Predictive/Forecasting Model and geometries ( Geo and ). However, they are often used as third-place elements, as they carry a lesser probability weigh than the Model itself, or the geometries.
A recent $ZAR analysis was invalidated as price continued to soar (faded in the chart), whereas a nascent widening geometry is developing (highlighted in black lines) - I would pay particular attention to the third and often last validation of the upper line as a probable sign of imminent reversal. However, these can occur right on the line, above it, or some rarer times, not even making it to the line.
However, combining this expanding geometry with the pattern adds a slight gain in probability.
More on this as price continues to rally. Note also that this rallying is probably on the back of a strengthening $USD rather than a weakening South African Rand, as most of the $USD pairs are display a similar behavior relative to the dollar. However, and as mentioned this week-end, there is a high-probability of reversal in the USDollar Index, which is likely to correspond to the distance before reversal in other major and minor crosses.
Predictive Analysis & Forecasting
Durango, Colorado - USA
Linked-In: David Alcindor
This is the same chart, at its H4 level ... No change in the forecast:
Probable rally resumption into target from current structural support level:
This 1-hour chart suggests a potential widening geometry with the opportunity to apply the ATHENA method ... Look for the parallels from opposite side to impose their resistance on the ascending price:
Downside risk per 1.414-FE; JANUS remains a high-probability event:
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There are certain Fibonacci values which the trader should keep in mind for the purpose of anticipating a trading plan or perhaps the development of a pattern.
A (RARE) KIND WORD ON PATTERNS:
For instance, when I used to trade patterns, I would simply stick to Scott Carney's Bat and Shark patterns, although the Sharp is what I'd call a quasi-pattern, and acting more like the "door-keeper" to the 5-0 pattern, as it demands a different set of point definition (in essence, this is the only 5-point pattern that starts at zero, all others originate at point-x ... And for a good cause, but that's another discussion all to itself).
Let's contemplate the following chart and thrown some fibs around:
Now, if you take a moment, your visual cortex would likely crackle loudly, projecting wishes, possibilities and probabilities through your planning frontal cortex machine. You'd probably think up of simple patterns, such as head and shoulder, and perhaps more of the classics, such as Scott Carney's breed of pattern (see his panoply of patterns at www.HarmonicTrader.com, or follow pattern-based trading through @Akil_Stokes, who is perhaps the only professional trader able to profit from patterns - His profile can be found here: https://www.tradingview.com/u/Akil_Stokes/ ).
LOOKING AT RELEVANT FIBONACCI VALUES:
Now, here are a few relevant Fibonacci validations:
First, there is the run-of-the-mill symmetrical projection at twice the projected height, where the Fibonacci extension ("FE") equals 2:
Then, there is the all too famous 1.618-FE:
Now, here is where pattern trading and Fibonacci values used to be important to me: First remember the following values - You will notice that the values following the decimal keeps this series in a regular sequence of 1, 2, 3, and 4:
As you recall, I have often used 1.414 as a recommendation for entry or exit in the educational trades I share on TradingView. I explain that in an aggressive market, 1.414 is where institutional traders are likely to push price to, so as to hunt for stop-losses, but they can also fall short of the widely expected 1.618 handle, so as to keep well-wishing traders hold the bag. So, the take-home point here os to use 1.414 as an actionary level as you contemplate either entering or exiting a trade, rather than looking at it in a reactionary, come-lately level.
Here is where that level comes relevant:
As you might appreciate, the 1.618-FE comes quite near the defined completion of a proprietary target, I have called JANUS. However, this is not necessarily where you might seek to either exit if you were into a long position, or if you were contemplating a short entry. Instead, I would stick to the 1.414-FE handle - Sure, greed inspires you to wait for the 1.618-FE handle, so if you have to "urgently" answer to this gnawing urge, at least consider a 25/75, 50/50 or 80/20 partial entry at both ... This is really up to you, your risk tolerance and predefined risk management. In any case, "fronting" a position is perhaps the most prudent action you might contemplate, rather than a sad, painful reaction - Losing with this type of plan is much less painful than the uncertainty of repeating a once-lucky, never-recurring profiting trade. Trust me on this.
Let's look at other Fibonacci levels - In the following frame, I have left what corresponded to the 1.414 (yellow) and 1.618 (purple handles), and move the Fibonacci matrix as shown:
The values are what I had listed earlier above ... Do you see something relevant here?
Here is what I see:
1 - Price had shaped into a Scott Carney's Shark:
The problem here is that first, I do not trade pattern anymore, as they are simply less reliable than what I have established for myself (in a former rant against patterns, I simply wwould explain that patterns are "skin layering", or an imperfect envelop of a perfect skeletal - Imagine or Google the image of a morbidly obese person, then look at the skeletal frame, and you will know what I am talking about ... Here too, as I often say when discussing any organic form of life: "Form follows function", and it is the skeletal innards of an organism (geometry) that will reveal the function (trading) of the system in consideration. A House stands on its supportive system of beams, and not on its walls ... Told you, I'd rant (again) ... 'Nuff said, as I lost too much money trading patterns (Google a comment I made years ago regarding "success rate of pattern" for more explanation).
So, as the Shark formed, it retracted to more than 50%, which is what was expected of the 5-0 Pattern. So, had you entered the 5-0 pattern, you'd be in a losing position at this time.
2 - Price projects to the 1.313-FE and forms a cluster with the pre-defined 1.414-FE:
Of all the use of Fibonacci scales, the most relevant to my trading is whether there is consonance among the FEs, as in this case. If there are two, this perks up my interest in that level. If there are three, I devise a trading plan all around it. BTW, remember what my position is regarding 1.414-FE. This cluster is worth heeding.
Lastly, and perhaps of a lesser relevance, this 1.313-FE comes in near-alignment with the level I had defined for the proprietary JANUS pattern:
There is nothing too intimidating about Fibonacci values, except the very fact that they are pervasive, universal and ubiquitous. In trading, minor and major values, such as the ones I have listed above can be used to your advantage. Often, I receive request to rescue distressed accounts, and what I first and foremost look for is the 1.414-FE handle. If that level has been surpassed, and the 1.618-FE remains pending, I recommended a stand-by. If instead, the 1.618 has been surpassed by its own 1.414-FE reletive to the prior 1.414, then I'd recommend to divorce from the position and return to the pool of other seductive trading opportunities that abound in the financial markets.
Do not be attached, but respect the sacred bonds of the 1.414-FE handle. If this breaks, question the entire relationship and detach yourself from the trade.
Durango, Colorado - USA
Again, thank you for this and other helpful feedback.
I post pre-analyses there. I do a poor job at responding there, since I prefer to interact directly in threads of published charts (it keeps me honest and benefits the community by sharing thoughts, ideas, pearls and lessons). But the rooms, even if more quiet, are full of my insights and methods which are not necessarily revealed once the chart is published.
Have a great day!