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 Wolfe Wave). 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 DAILY chart 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.
Best,
David Alcindor Predictive Analysis & Forecasting Durango, Colorado - USA
This is the same chart, at its H4 level ... No change in the forecast:
David Alcindor
Kommentar
⋅
11 NOV 2015 - Chart Update / Tech-Note:
Probable rally resumption into target from current structural support level:
David Alcindor
Kommentar
⋅
19 NOV 2015 - Chart Update / Tech-Note:
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:
David Alcindor
Kommentar
⋅
19 NOV 2015 - Chart Update / Tech-Note:
Downside risk per 1.414-FE; JANUS remains a high-probability event:
09 NOV 2015 - Major, minor and relevant Fibonacci values.
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 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: 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:
- 1.131
- 1.272
- 1.313
- 1.414
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:
OVERALL:
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.
Cheers,
David Alcindor
Durango, Colorado - USA
johnmad
⋅
Thank you for that Harmonic refresher of the Janus Pattern .
MarkLangley
⋅
thank you David posted a chart today and targeting similar move to complete at 14.62 , keep up great analysis
Heelfan23
⋅
Yet another great lesson!!!! Thank you again for your generosity, and willingness to teach others. I feel it more and more, soon you will be back to teaching (HOPEFUL ON MY PART! LOL). It seems to be of your makeup.
Thank you again David!
I seem to say that daily
4xForecaster
⋅
Thank you @Heelfan23. I appreciate your feedback. It's a rare compliment I enjoy, as it helps me gauge the level of interest and proficiency of this community - If you believe some might enjoy this and other lessons on parts or in whole, feel free to cut/paste the URL using the "link" - This will help them book, safe and return to these lessons at will.
Again, thank you for this and other helpful feedback.
David
4xForecaster
⋅
PS: Be sure to follow the pre-analyses rooms.
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.
Thank you.
David
Heelfan23
⋅
I do try to check in on the rooms at least every couple of days, but try not to post on them as you requested. I usually bring my questions into TV so others might learn from the questions asked. I would love to share your info with others, but I really don't know any other traders. I somewhat feel as though I'm on a secluded island when it comes to trading. TV has been such great find for me personally. I am so glad that I have found your threads, these definitely are pearls!!! I look forward to read every post, as I am sure there will be something to learn from it.
Have a great day!
Scott
4xForecaster
⋅
Thank you @ Heelfan23 - The purpose of my sharing so much more information than I had ever discovered when I started to trade back in 1997, is that most of what is taught is often discounted in the analysis. Many traders turn to simple geometries (such as head and shoulder, channels, ... etc) or advanced patterns (such as Scott Carney's Bats, Butterflies and Sharks), but if you have traded long enough, you will find that these are becoming less and less profitable, as more and more software are already participating in the discounting of this data.
For instance, there use to be a time when price would consistently rally to wholesome and known Fibonacci levels. But not anymore. If you set your Fib matrix at 0.75 for instance, you will see that a lot of the retracement stop right there, in excess of the 0.618 and short of the 0.786, both of which are variables of the Golden number. This causes some eager newbies to give up their positions too soon, or those with too-tight SLs to lose their positions just as sadly.
I wrote a short rant on pattern trading as well, as few years back on questioning what traders define "successful patterns" - Here too, unless you know what you are doing and find an edge with some proprietary indicator or method (as I have, and as some other successful traders do too), there is simply no way to maintain a consistent earning on pattern trading alone. I always site Akil Stokes as one trader I was partnering with a few years back when we all belonged to the "MasterMind" group in Kansas City -(Darren Oglesbee was also a member of this group and graciously released his Cypher pattern to our group before making it public), but here too, even the most expert, erudite trader lacks consistency unless he/she owned some proprietary system.
So, if you are new to this, I suggest that you start looking at the literature with a critical stance. Most of what is talk is wrong or distorted from the original scripts of the author (my expertise with all humility applied here is RSI, and I can say that most of the literature release by trading account services or professional trading educators is simply erroneous, distorted, or at best wrong).
If I had to go back and regain all of my years of lost earnings from misdirected trades inspired from erroneous lessons and egocentric, self-serving "professionals", I would simply learn from the source:
1 - Elliott Wave International, Robert Prechter - This would have given me the chance to get so busy and mentally banged up that I would have benefited by ignoring all the other commercial services that taught me nothing in comparison to what can be learned from EWI.com. Period.
2 - Scott Carney's trading patterns ... He is the author of most known patterns: HarmonicTrading.com 3 - Any book from Constance "Connie" Brown
While all of the above references are from proven authors or curators of original works, they will teach the novel trade about everything you will even need to know about trading - This is what I would define as the FORM of trading (I view things in terms of form and function ... part of my undergraduate architectural mindset, I guess). The FUNCTION, which is understanding how elements of trading (FORM) come together can be best understand by reading expertise lessons in intermarket analysis.
Here are the authors I fall back on, when offering references on intermarket analysis:
My undergraduate degree was in architecture (1995 - University of Kansas) when I concentrated my interest in sacred numerology and Arab architecture (as it contains the most relevant topics on these), and the study of organic, vernacular architecture where the concept of "form follows function" has shaped my approach to everything else, even now as an emergency physician. When I took up trading in 1997, I looked at all aspects of human activity (of which there was yet a lot to learn when facing this new financial market in my beginnings) through these two interlocked concepts: Form and function - If things have a function, they will remain inescapably subservient to function by the very shapes they will have to take. An organism in the wild takes on a shape that serves its surviving function.
In the financial markets, if you dig a little, you will SEE a similar organic repetition, where the shape is bound to the function of the ever-growing system which gives it a gait, a pace and a stride, all of which are behaviors that will help you forecast where the heel of this moving organism might strike next with some comforting probability - But you must close your eyes to the crowd first, turn your back to institutional inculcations and look at things in the most indirect way possible - My Model ignores price, volume and time per se, for instance.
Best,
David Alcindor
Heelfan23
⋅
Thank you again for such a great and informative response!!! Sorry it took me so long to say that. I am in the process of selling my landscape business, as well as doing a catering, it has been a busy week.
I really appreciate you taking the time to write such a great response, as well as an insight as to how you approached things as a new trader, and how you look at the market now. I start my new journey by purchasing a subscription, as well as classes on reading a services indicators. I traveled that road for a few months and finished my training, but wanted to learn more about the movement of the market. So I started looking into the structure of the market. I felt at the time, if I new where the market might be going in the longer term, then the indicators would be that much valuable to me. In the short journey the I've been on, I realized the indicators are not necessary. So my new path is to learn as much about the structure as I can (time permitting). I have tried to go back to square one and basically start over, as staring at indicators doesn't really teach much about how the market moves, other than for a brief moment, if you are able to capitalize on it.
So, once again thank you so much for the references, and the great information you have shared with me personally, as well as others.
I do have one other question (well, really thousands but....). It seems that a lot of your analyses is based off of Wolf Wave, yet you didn't reference the Bill Wolf books, or Wolfwave.com. Is there a reason for that, or just an oversight?
4xForecaster
⋅
11 NOV 2015 - Chart Update / Tech-Note:
Probable rally resumption into target from current structural support level:
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 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: 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:
- 1.131
- 1.272
- 1.313
- 1.414
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:
OVERALL:
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.
Cheers,
David Alcindor
Durango, Colorado - USA