Profitable Patterns: Fibonacci Retracements
Larry Pesavento is a 50 year veteran trader. He began his career trading full time in 1967 while in graduate school getting an MBA in Finance following a BS in Pharmacy. In 1982 he became a member of the Chicago Mercantile Exchange where was a local in the S&Ps currency pits. Following this he worked for a commodity corporation in Princeton New Jersey from 1985 to 1986.
''Pattern One and Two are reaction patterns. The move from point B can be 38%, 50%, 61%, 70.7%, 78%, 100% ( double top or bottom). The only time I use the 38% retracement level to find a trade entry is when the move from A to B is one of tremendous thrust (three to five times normal trading range bars). The market will give you strong clues as to what it will do next if you watch the retracements in new moves. If it reacts only 38% on the first reaction swing, then a high probability exists that the next swing or two will also be 38% reactions.''
- Larry Pesavento, Profitable Patterns for Stock Trading
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''Pattern One and Two are reaction patterns. The move from point B can be 38%, 50%, 61%, 70.7%, 78%, 100% ( double top or bottom). The only time I use the 38% retracement level to find a trade entry is when the move from A to B is one of tremendous thrust (three to five times normal trading range bars). The market will give you strong clues as to what it will do next if you watch the retracements in new moves. If it reacts only 38% on the first reaction swing, then a high probability exists that the next swing or two will also be 38% reactions.''
- Larry Pesavento, Profitable Patterns for Stock Trading
Found this post valuable? Make sure to LIKE and FOLLOW for more!
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