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Thoughts about bat pattern. Some tips and secrets. Part VII.Welcome back, traders. It’s Wednesday and we have another edition of “Thoughts about Bat pattern”. Today we’ll talk about a very weird thing called BAMM. My backtesting, forward testing and real trading pointed to a very interesting phenomenon. I have noticed that when price action violates B-point, it usually goes to 0,886XA to complete the bat pattern. Of course, C-point should be in its place before price action violates B)). For bear bats violation means a Higher High and Higher Close above B. For bull bats – Lower Low and Lower Close below B. This phenomenon was first described by the founder of Bat Pattern, Scott Carney. He called it BAMM. It stays for Bat Action Magnet Move. And it really works as it is called – like a magnet. Well, I repeat the idea: when B-point is violated the bat pattern usually completes. This gives us an edge, don’t you think? We have a higher probability of one thing happening over another. How can we trade it? We can trade it as a classical breakout strategy or we can trade it like a 2618. In first strategy we place our limits at B-point after the breakout and wait for a pull back to enter. In 2618’s we stretch fibs from the high/low of double top/bottom to a high/low of a breaking candle and place limits at 0,618 retracement to enter. I use the second method because I truly believe that market respects fibs)). So, what my BAMM strategy looks like? First I need to introduce a new point. I will call it “E”. It’s the high/low of a breaking candle. Suppose I am tracing a bear bat completion. After C-point completes I wait for a B-point violation. When I have a HHHC-candle I stretch fibs from C-point to this candle’s high (E-point). I place limit orders at 0,618CE and stops at 1,113CE. I use D-point as take profit. I close half of my position at E-point retest and move stops of the other half to breakeven. If price goes higher without triggering the entry, I restretch the fibs from C to a new E and modify my limit. If price hits D before 0,618CE then I delete my orders. I use stop and reverse technique to enter short when pattern completes. It means I sell two units. The first unit closes my long position and the second opens my short. For bull bats everything is vice versa. Note I use a combination of BAMM and Bat pattern strategies. Let’s look at some outcomes. If a bat pattern completes my BAMM wins and triggers my Bat entry. Trading Bats along I either have my Bat entries win or lose. Combining with BAMM I have a winning BAMM and a winning Bat or a winning BAMM and a losing BAT. Note that BAMM always wins when pattern completes. If BAMM loses then Bat pattern never completes and I delete my Bat entries. Ok, that’s all for today. Hope you find my edition useful. If so, press “like” and “follow” and I will give you much more. See the related ideas link to check my other editions
by Alexander_Nikitin
10
(BLOG) One of the Toughest Trades to TakeDespite going 0 for 2 (with 1 breakeven) in my swing trading today, I was able to nail both of the trades taken during Tuesday’s Live Trading Room session. It also just so happened that both of the trades taken were on the same pair and occurred right after each other. This doesn’t happen on a regular basis, but often enough for me to understand exactly how to handle the situation when it does. Here’s the trick…Just follow the plan and do what you’re supposed to do. Unfortunately to many traders this is easier said than done. I believe that taking back-to-back patterns is one of the hardest feats to overcome in trading. Let’s think about this for a minute. You’ve just taken a bullish gartley pattern, dealt with a little bit of pain as the market churned for a while only come out the other side with profit. Typically at this moment a trader would like to sit back, relax, let out a sigh of relief and maybe tap themselves on the back for following there plan and reaping the benefits. Let’s admit it, we trade in the toughest market out there and winning is a very difficult thing to do. However, instead of getting time to celebrate and refocus another opportunity appears going the exact opposite direction of your initial trade and the first thing that comes to mind is what? “______” “No way is the market going to reverse again already. I should just skip this trade so I don’t give back any profit.” Obviously, sometimes this will work in your favor but remember our job as pattern traders isn’t to guess which will be successful and which will not, our job is to execute every valid pattern that we see even if it’s very difficult to do mentally. However if you can pull it off it’s a great reminder of why we have rules and how the markets reward those who follow them This particular trade yielded close to 200pips total to a trader using 2 positions on multiple targets. Yup almost 200pips total on a 15 minute chart. I tell the clients I work with all of the time, “if you’re going to be a day trader stick to watching 4 pairs. Maybe 6 max.” Many think that it’s impossible to be profitable without a massive portfolio. Hopefully scenarios like this will provide a great example of how it’s not about the quantity of pairs you watch it’s the quality of how you can trade the ones that you do that matter most. Akil Stokes Chief Currency Analyst at www.TradeEmpowered.com Akil@Tradeempowered.com /@AkilStokesRTM / Forex Weekend Review Videos: www.youtube.com
by Akil_Stokes
6
Thoughts about bat pattern. Some tips and secrets. Part III.Hello, traders. It’s Wednesday here. It means we have another “Thoughts about bat pattern” edition. It is the third edition and if you have missed the first two, check the related ideas links. You’ll find them very useful. Let’s get it started then)). As I told you in the first edition Timeframe doesn’t matter in bats. Mostly because bat pattern pays no attention to candle closes. The only thing you need is the size of XA leg. If this size is very small, then your Fibonacci ratios will NOT work well. There’s the fact – the larger the move, the more precise Fibonacci ratios calculations. But very large move involves very large risk. See “Thoughts about bat pattern” first edition to find out what size of XA was proven to be optimal. Ok, today we’ll talk about the MOST IMPORTANT thing in bat pattern recognition. It’s XA leg. The topic is huge enough, so I will need to spend more than one edition to cover it. If you are somehow familiar to advanced patterns then you might have heard the rule: XA must be an impulse move. THAT’S COMPLETE RUBBISH. HERE”S THE TIP #4. XA must not only be an impulse leg. It may be whatever market movement. The only thing you have to pay attention to is X point location. It must be some sort of structure, a point where price changed its direction. If we see a trend (or some huge market movement) reversal in this point, then this point is called “major structure”. If we see some small movement (correction or whatever) reversal in this point, then we are facing minor structure. Triangles, flags, wedges are also serve very good structure areas. X point is usually situated on either boarder of these formations. XA move may also unite two or more impulses. There’s an algorithm of detecting XA. This algorithm has proven its effectiveness. It consists of a series of actions (mostly mental) that if done allow you to detect the most appropriate XA. I will reveal the algorithm itself next time. Today I will only give you a hint: X-point is not the first point that must be detected to find an appropriate XA move. Well, it’s all for today. If you like the edition press “thumb up”. Follow me on Tradingview in order to be sure you won’t miss the next edition. P.S. If price comes to breakeven you will have a chance to enter short the bat pattern detected on the chart))
Short
by Alexander_Nikitin
2
GBP/USD - Bat pattern - D leg completion at 1.574GBP/USD - 240 Chart - Bat Pattern GBP/USD last week gave us +240 pips at the completion of a previous Bat Pattern ( Blue Pattern) Here now on the 240m chart of GBP/USD we have another nice Bat Pattern setup ( Pink Pattern ) We are on the 4h chart so this is some time yet from completing, however it is more beneficial to be 1 step ahead at all times. We must see a completion at D leg ( 1.574 ) before any short entry is triggered. - SL must go above X - Target 1 at 38.2% retracement - Target 2 at 61.8% retracement Good luck.
by UnknownUnicorn180388
1
gbpusd bull bat patternhi, mates. It looks like we are to see this bat pattern completion. I am to buy at D point. Stops just below X. First target is 0,382AD and the second is 0,618AD. When first target is reached roll stops to breakeven. mostly it's connected with the fact that 0,382 fibonacci retracement is usually a trend continuation retracement. So we can easily see a move to the downside which will take all our profits away.)) for more details and tip of batpatterns check the links i attached.
Long
by Alexander_Nikitin
Thoughts about bat pattern. Tips and secrets. Part II.TIP #3. This tip is mostly connected with the rules. You don’t need to invent your own rules, because all rules are already invented. You just need to choose a set of rules that suits best to your personality. How can you know what rules suit your personality? Do backtesting. Scroll the chart back in history and trade the Market using this set of rules as if real time, bar by bar, candle by candle. Only MANUALLY. After you have spent a thousand hours backtesting some set of rules, I assure you it will become your alter ego (second nature). Hahaha. What is 1000 of hours? If you are backtesting 10 hours a day, then a 1000 hours = 100 days = 3+ months. Your habits will change little by little, your beliefs will change, your personality will change. Of course, this set of rules will suit your personality)). You should always have the result of your backtesting in front of your eyes. While doing backtesting you were to write down all the trades, results and times. Then you were to draw an equity curve and a pip (percentage) curve. These drawings are NOT what you need to have in front of your eyes. Pip curve should be a steadily rising curve, a series of higher highs and higher lows. This curve MUST NOT have drawdowns more than 30%. Otherwise, you are to change some rules, optimize the set. Equity curve will repeat the move of a pip curve if you don’t use MM. If you use MM, increasing the position size, then it should look like a rising parabola. Note that 10% drawdown in the pip curve may easily cause a 30% drawdown in the equity curve. Especially when the drawdown began immediately after you have raised your position size. No matter what MM rules you have)). See picture 1 and picture 2. This time you should not change the trading rules optimizing the set. It won’t help. This time ONLY portfolio will solve the problem. How to add pairs to your portfolio? Backtest another pair and see the curves. If they are similar to picture 1 and 2 then add this pair. If they are not, then discard the pair. After you have chosen pairs consisting your portfolio, write the results of ALL pairs down in order of their appearance (hope you have written the times of trades, otherwise start all over from the very beginning)))). Draw the curves of the united results. If your 30% drawdowns haven’t disappeared it means that your portfolio consists of pairs moving the same way. For example, you portfolio consists of eurusd and usdchf only)). In other cases you huge drawdowns will disappear. See picture 3 and 4. Print these drawings. This time they ARE what you need in front of your eyes). If your realtime trading curves are not similar to the curves you had in backtesting it means that you are BREAKING your rules or you make some other execution errors. Find these errors and eliminate them. It was a preface. Now we came to the point. What is TIP #3? It’s as simple as this: don’t trade bats on USDJPY M5 and USDCAD M5. They show NEGATIVE expectancy. Hope you liked my thoughts. If yes press like button. Follow me on tradingview and you get much more tips and secrets for free.
Education
by Alexander_Nikitin