Edition

IFTA JOURNAL
2017 EDITION
Figure 5. Roche (ROG.VX) from 15-01-2014 to 17-09-2014:
An example of how to calculate the bullish target 38.2%
of engulfing pattern (successful pattern)
Figure 6. An example of how to calculate the bearish
target 100% of evening star pattern (successful pattern)
The Negative Closing Below the Lower Filter
This closing is considered as confirmation for the negative
Japanese candlestick patterns (or failure for the positive
Japanese candlestick patterns), and you can use the following
mathematical equations to calculate the targets of the negative
closing below the lower filter based on the Fibonacci ratios
(61.8%, 50%, 38.2%, and 23.6%) in addition to the 100% ratio:
Figure 7. Sumitomo Mitsui Financial (8316.T) from 22-
05-2008 to 23-10-2008: An example of how to calculate
the bearish target 100% of descending Hawak pattern
(successful pattern)
• Bearish Target 100% = F1 - [(F1 - F2) × N]
• Bearish Target 61.8% = F1 - [(F1 - F2) × N × 0.618]
• Bearish Target 50% = F1 - [(F1 - F2) × N × 0.50]
• Bearish Target 38.2% = F1 - [(F1 - F2) × N × 0.382]
• Bearish Target 23.6% = F1 - [(F1 - F2) × N × 0.236]
Where:
F1: upper filter level.
F2: lower filter level.
N: Number of candles that closed between the upper filter
level (F1) and the lower filter level (F2) of Japanese candlestick
pattern.
Figure 8. Lloyds Banking Group (LLOY.L) from 21-09-2009
to 21-12-2009: An example of how to calculate the bearish
target 61.8% of homing pigeon pattern (failed pattern)
Figures 6 through 10 show examples of how to calculate the
bearish target levels.
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