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Alexander_nikitin

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
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