Mapping Your Voyage of Discovery - CQG.com

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PatternsIn many ways, patterns are far easier to interpret than the myriad forms of momentum, inrespect that the pattern remains constant. Only its range, where the pattern is within thelarger scope of the chart and volume associated with it are variables. I typically referencethe state of momentum in relationship to a pattern. However, the perennial problem withpatterns is the sheer volume of them and how do you work out which ones are important?Without a sound filter check, you will be continually seeing patterns and being forced tomake decisions. It is no accident, that in my own trading armoury, there are just threetraditional patterns I care about. Candlesticks patterns can be the worst. From what I canmake out there is a pattern for every permutation of price action. This means that there isan answer to everything but a solution to nothing.We will look at those three patterns later, but first we will look at a few popular patterns,and you can decide their relevance.
Island ReversalsIsland Reversals used to represent one of the most powerful patterns. There frequency hasfallen, but the redefinition of data (for those that make the effort) means that this patternmust be respected. The golden rule is never to trade against an Island Reversal.• It is at least a 3 bar pattern. In an uptrend, the second bar has a low that is abovethe high of the previous and the third bar has a high that is below the low of thesecond. Effectively you can draw a circle around the pattern. The more bars withinthe formation, the more powerful the signal.Islands are rare in Financials, but more prevalent in commodities. This Bund Island back in2005 was a classic and all-time high for some years.
Page 1 and 2: IntroductionStructure is everything
Page 3 and 4: have been enough. Through time, I b
Page 6 and 7: Part 1Basic Chart TypesConstant vol
Page 8 and 9: The 10-minute chart and the 25,000
Page 10 and 11: Profile® is that linking price, ti
Page 12 and 13: Basic philosophiesIt is primarily u
Page 15 and 16: TFlow and Pre Trade AnalyticsTFlow
Page 17 and 18: This is how my TFlow is first displ
Page 19 and 20: SmoothedSmoothed use a proprietary
Page 21 and 22: This example highlights once more h
Page 23 and 24: What does Entry Signal Evaluator do
Page 25 and 26: Momentum IndicatorsThe vast majorit
Page 28 and 29: Slow StochasticsSlow Stochastics re
Page 30 and 31: This chart is half day of the Eurod
Page 32 and 33: Trend Lines and FibonacciThe need t
Page 36 and 37: FX is an area where no one looks fo
Page 38 and 39: DOJI’SThis the only Candlestick p
Page 40 and 41: Analysis from the Profile Area Tool
Page 42 and 43: Intraday Doji’s can be qualified
Page 44 and 45: The top itself was a Shooting Star
Page 46: Fundamental Analysis.How to interpr

Mapping Your Voyage of Discovery - CQG.com

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