Silver - Livermore accumulation cylinder pattern
Updated
The Livermore accumulation cylinder pattern is a complex trading pattern that has ten peaks. Peaks 8, 9, and 10 are particularly important because they signal the advanced stages of the pattern, where price movements often become more volatile and approach the final phase.
Here are some general guidelines on how to identify these peaks:
1. 8th Peak (followed by a drop): The 8th peak usually marks a significant high before a sharp drop. After this drop, the market begins to recover, but the movement tends to be unstable. Look for a rapid price drop followed by a rebound to an short-term support level.
2. 9th Peak (attempt to recover): After the drop from the 8th peak, the 9th peak often represents the market’s last attempt to rally. This is typically a minor bounce where the price tries to return to previous levels, but usually falls short of the 8th peak. This indicates exhaustion and a decrease in buying interest.
3. 10th Peak (final wave and breakdown): The 10th peak usually signals the last strong push upward before the market begins a significant decline. This last peak may fall short of the 8th or even the 9th peak level, or, in rare cases, it may momentarily break above the 8th peak if there’s a slight surge in buying power. When the price starts to drop sharply from the 10th peak, it can indicate the end of the cycle and a larger trend reversal.
Identifying Livermore’s pattern requires patience and close observation. Additional tools like volume analysis (to track changes in buying interest) and support levels around previous peaks and troughs can be helpful in confirming these peaks.
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"Livermore used to say: "Whatever happens in the stock market today has happened before and will happen again”
Here are some key rules by Jesse Livermore:
Markets are never wrong opinions often are. Back your judgment and don't trust your opinion, until the action of the market itself confirms your opinion
Few people ever make money on tips, beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket
Money is made by sitting, not trading. It takes time to make money. Don't give me timing; give me time
Buy right, sit tight. Big movements take time to develop. Men who can both be right and sit tight are uncommon
Money cannot consistently be made by trading every day or every week during the year
Nothing new ever occurs in the business of speculating or investing in securities and commodities
Never average losses
The human side of every person is the greatest enemy of the average investor or speculator. Wishful thinking must be banished
Jesse Livermore argued that before opening any position, the market must first confirm and support any thesis. The market has to confirm the trade before the full size of the trade is executed. He used to say that ‘Markets are never wrong – opinions often are’. That means we must not trust our own opinions until the price action confirms these opinions.
Here are some more tips according to Mr. Livermore:
Trade only if there are real opportunities in the market
Use price patterns, as historically, the market tends to repeat
Don’t overtrade, and don’t trade every day
Use pivotal points to trade
Follow the trend and run your profits (It takes time to make big money)
Don't average down your losses." (Trading Center)
“Jesse Livermore Trading Method” Trading Center, Trading Center, 09/11/2024, tradingcenter.org/index.php/learn/trading-tips/330-jesse-livermore
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Note: I am sharing my thought process on these market moves and adjust my analysis as the market evolves. This is not meant to be followed by others, as I am prone to mistakes like anyone else. Instead, I welcome feedback that can help me question and refine my analysis.
Here are some general guidelines on how to identify these peaks:
1. 8th Peak (followed by a drop): The 8th peak usually marks a significant high before a sharp drop. After this drop, the market begins to recover, but the movement tends to be unstable. Look for a rapid price drop followed by a rebound to an short-term support level.
2. 9th Peak (attempt to recover): After the drop from the 8th peak, the 9th peak often represents the market’s last attempt to rally. This is typically a minor bounce where the price tries to return to previous levels, but usually falls short of the 8th peak. This indicates exhaustion and a decrease in buying interest.
3. 10th Peak (final wave and breakdown): The 10th peak usually signals the last strong push upward before the market begins a significant decline. This last peak may fall short of the 8th or even the 9th peak level, or, in rare cases, it may momentarily break above the 8th peak if there’s a slight surge in buying power. When the price starts to drop sharply from the 10th peak, it can indicate the end of the cycle and a larger trend reversal.
Identifying Livermore’s pattern requires patience and close observation. Additional tools like volume analysis (to track changes in buying interest) and support levels around previous peaks and troughs can be helpful in confirming these peaks.
--
"Livermore used to say: "Whatever happens in the stock market today has happened before and will happen again”
Here are some key rules by Jesse Livermore:
Markets are never wrong opinions often are. Back your judgment and don't trust your opinion, until the action of the market itself confirms your opinion
Few people ever make money on tips, beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket
Money is made by sitting, not trading. It takes time to make money. Don't give me timing; give me time
Buy right, sit tight. Big movements take time to develop. Men who can both be right and sit tight are uncommon
Money cannot consistently be made by trading every day or every week during the year
Nothing new ever occurs in the business of speculating or investing in securities and commodities
Never average losses
The human side of every person is the greatest enemy of the average investor or speculator. Wishful thinking must be banished
Jesse Livermore argued that before opening any position, the market must first confirm and support any thesis. The market has to confirm the trade before the full size of the trade is executed. He used to say that ‘Markets are never wrong – opinions often are’. That means we must not trust our own opinions until the price action confirms these opinions.
Here are some more tips according to Mr. Livermore:
Trade only if there are real opportunities in the market
Use price patterns, as historically, the market tends to repeat
Don’t overtrade, and don’t trade every day
Use pivotal points to trade
Follow the trend and run your profits (It takes time to make big money)
Don't average down your losses." (Trading Center)
“Jesse Livermore Trading Method” Trading Center, Trading Center, 09/11/2024, tradingcenter.org/index.php/learn/trading-tips/330-jesse-livermore
--
Note: I am sharing my thought process on these market moves and adjust my analysis as the market evolves. This is not meant to be followed by others, as I am prone to mistakes like anyone else. Instead, I welcome feedback that can help me question and refine my analysis.
Trade active
4H chart: The bullish divergence on this timeframe suggests potential strength building in the underlying momentum. This divergence, typically marked by lower lows in price but higher lows in the RSI or MACD, often signals that the downtrend may be losing steam and could reverse.
1H chart: Similarly, the bullish divergence on the 1H chart adds a layer of confirmation to the potential reversal, indicating that buyers might be stepping in at these levels.
The formation of an inverse head and shoulders pattern on the 1H chart provides further bullish signals. This pattern, often a reversal setup, can imply that a bottom might be forming. Key levels to watch will be the neckline (usually where the price has peaked between the shoulders), as a breakout above this level could validate the bullish pattern and trigger further upside.
Order cancelled
My silver analysis didn’t pan out—more like panned down. Time to scrap it and polish up a new post! Still holding my long, though—I’m still seeing upward potential, just need a chart makeover.
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