GARTLEY Harmonic Pattern: How does it work?!GARTLEY Harmonic Pattern: How does it work?!
The "Gartley", as its name suggests, was introduced by Henry Mackinley Gartley.
All other harmonic patterns are modifications of the Gartley.
Its construction consists of 5 waves:
XA: This could be any violent movement on the chart and there are no specific requirements for this movement in order to be a Gartley start
AB: This is opposite to the XA movement and it should be about 61.8% of the XA movement.
BC: This price movement should be opposite to the AB movement and it should be 38.2% or 88.6% of the AB movement.
CD: The last price movement is opposite to BC and it should be 127.2% (extension) of CD if BC is 38.2% of BC. If BC is 88.6% of BC, then CD should be 161.8% (extension) of BC.
AD: The overall price movement between A and D should be 78.6% of XA
How to use it
Point D is where you come in, man! It's your entry signal.
-If it's an M pattern, you buy.
-If it's a W, you sell2.
Where to put your STOP LOSS??
-Below or "X" if you are a BUYER.
-Above "X" if you are a SELLER.
These percentages are based on the famous Fibonacci ratios, as mysterious as the pyramids of Egypt!
Ultimately, the Gartley pattern is like a good Cuban cigar: it requires patience and experience to be appreciated at its true value. But once you master it, it can become a powerful tool in your trading arsenal, as effective as a punch from Rocky Balboa!
Jameswolf
The Symmetrical Triangle: Real Success Rates + Breakout.The Symmetrical Triangle: Real Success Rates + Breakout.
The symmetrical triangle is an important chart pattern in technical analysis, deserving special attention from professional traders.
This formation is characterized by a convergence of prices between two trendlines, one descending and the other ascending, creating a consolidation zone where indecision between buyers and sellers is palpable.
Statistical Analysis
Empirical data reveals that the success rate of the symmetrical triangle for a trend continuation is approximately 54%. This percentage, although higher than 50%, underlines the importance of a cautious approach and rigorous risk management in using this pattern.
Breakout Point
The breakout of the symmetrical triangle usually occurs when the price has traveled approximately 75% of the distance to the apex. This point is crucial for traders, as it often represents the moment when volatility increases and a new trend can be established.
Risks and False Exits
It is essential to note that the symmetrical triangle has a relatively high rate of false exits. Statistics indicate that approximately 13% of cases in a bear market can result in a false exit to the bottom. This phenomenon underlines the need for additional confirmation before entering a position.
Strategy of use
To effectively exploit the symmetrical triangle, professional traders must:
-Identify the formation accurately.
-Wait for the breakout near the point of convergence of the trendlines.
-Confirm the breakout with other technical indicators or an increase in volume.
-Put in place strict risk management to protect against false exits.
In conclusion, the symmetrical triangle, although being a valuable tool in the trader's arsenal, requires a methodical approach and a thorough understanding of its characteristics to be used effectively in a trading strategy.
Actual Success Rates of Ascending and Descending TrianglesActual Success Rates of Ascending and Descending Triangles
Here is an analysis of the actual success rates of ascending and descending triangles in trading, based on the information provided:
Success Rates
Ascending and descending triangles generally have fairly high success rates as continuation patterns:
-The ascending triangle has a success rate of approximately 72.77%.
-The descending triangle has a slightly higher success rate of 72.93%.
These numbers come from a study that tested over 200,000 price patterns over a 10-year period.
Factors Influencing Success
Several factors can influence the success rate of these patterns:
-The trader's ability to execute the strategy correctly
-Market conditions at the time the triangle formed
-Market liquidity
-Overall market sentiment
Important Points to Consider
-Triangles are considered reliable continuation patterns, especially in trending markets.
-The ascending triangle in an uptrend is statistically more reliable than the descending triangle.
-To validate the pattern, the price must touch at least twice each of the upper and lower lines.
-An increase in volume during the breakout is an important confirmation sign.
Strategies to improve the chances of success
-Wait for the triangle to fully form before entering a position1.
-Confirm the breakout with a close above/below the resistance/support level.
-Use additional technical indicators to confirm the signal.
-Pay attention to the volume, which should increase during the breakout.
Conclusion
Although ascending and descending triangles have relatively high success rates, it is important to use them in conjunction with other technical analysis tools and to take into account the overall market context to maximize the chances of success.
The 45 Degree Line: A Very Effective Tool in Trading.The 45 Degree Line: A Very Effective Tool in Trading.
When the ppix of an asset explodes and forms a very steep slope, the 45 degree line, also known as the 1x1 Gannangle, is an important and very useful tool in technical analysis, used to identify and predict market corrections.
Meaning of the 45 degree line:
The 45 degree line represents an equilibrium trend in technical analysis. It is considered an average support or resistance line, indicating a balance between time and price. This line is particularly important because it suggests a constant and balanced progression of the market.
Main characteristics
-Angle: The 45 degree line forms an angle of 45° with the horizontal axis of the chart.
-Notation: It is often noted 1x1, which means that it represents a movement of one unit of price for one unit of time.
-Interpretation: A trend following this angle is generally considered strong and likely to continue in the same direction.
Use in Technical Analysis
Traders use the 45-degree line in several ways:
-Identifying trend strength: A trend that follows or exceeds the 45-degree angle is considered strong.
-Support and resistance: The line can act as a dynamic level of support in an uptrend or resistance in a downtrend.
-Forecasting movements: Traders can anticipate trend changes when price deviates significantly from the 45-degree line.
-Multi-timeframe analysis: The line can be applied on different time frames, from short-term to long-term, for a more comprehensive analysis.
Integration with other tools
The 45-degree line is often used in conjunction with other technical analysis tools for a more robust analysis. It can be combined with indicators, chart patterns, or other Gannangles to confirm trading signals and improve forecast accuracy.
In conclusion, the 45-degree line is a powerful but often underestimated tool in technical analysis. Its simplicity and versatility make it a valuable tool for traders looking to identify and follow market trends with precision.
IMPORTANT Macroeconomics: What is the trade balance?IMPORTANT Macroeconomics: What is the trade balance?
The trade balance is an important economic indicator that can have a significant influence on the stock markets.
Here is a simple explanation of this concept and its potential impact:
What is the trade balance?
The trade balance represents the difference between the value of a country's exports and imports over a given period.
In other words:
- If a country exports more than it imports, its trade balance is in surplus (positive).
- If a country imports more than it exports, its trade balance is in deficit (negative).
Impact on the stock markets
The influence of the trade balance on the stock markets can vary depending on whether it is in surplus or deficit:
Trade balance surplus
A trade surplus can generally have a positive impact on the stock markets:
- It indicates strong competitiveness of domestic companies in international markets.
- It can strengthen the value of the national currency, which can attract foreign investors.
-Exporting companies may see their shares increase in value.
Trade deficit
A trade deficit can have a negative impact on stock markets:
-It can indicate a weakness in the domestic economy or a loss of competitiveness.
-It can weaken the domestic currency, which can discourage foreign investors.
-The shares of companies dependent on imports may be negatively affected.
Important nuances
It is crucial to note that the impact of the trade balance on stock markets is not always direct or predictable:
-Overall economic context: Other economic factors can attenuate or amplify the effect of the trade balance.
-Investor perception: The reaction of the markets often depends on how investors interpret the trade balance figures in relation to their expectations.
-Specific sectors: Some sectors may be more affected than others by changes in the trade balance.
In conclusion, although the trade balance is an important indicator, its influence on stock markets must be seen in the broader context of the economy and investor sentiment.
"Hindenburg's Omen" to predict a stock market crash."Hindenburg's Omen" to predict a stock market crash.
"Hindenburg's Omen" is a technical indicator in financial analysis designed to predict a potential significant decline or a stock market crash.
Here are the main things to remember about this indicator:
Definition and origin
Introduced by Jim Miekka in the 1990s.
Named after the Hindenburg airship disaster in 1937, symbolizing an unexpected disaster.
How it works
- Hindenburg's Omen is triggered when several conditions are met simultaneously on a stock market:
- A high number of stocks reaching both new highs and lows over 52 weeks (usually more than 2.2% of stocks).
- The number of new highs must not exceed twice the number of new lows.
- The stock index must be in an upward trend (positive 50-day or 10-week moving average).
-The McClellan Oscillator (sentiment indicator) should be negative.
Interpretation
-When these conditions are met, the Omen suggests underlying market instability and an increased risk of a significant decline.
-The signal remains active for 30 trading days.
Reliability
-The indicator has correctly signaled some historical crashes, such as the one in 1987.
-However, its reliability is questionable as it also produces many false signals.
Usage
-Generally used in conjunction with other forms of technical analysis to confirm sell signals.
Traders can use it to adjust their positions or as an alert for increased market monitoring.
It is important to note that, like any technical indicator, the Hindenburg Omen is not infallible and should be used with caution, in conjunction with other analytical tools.
In the following photos, a harmonic "BLACK SWAN" pattern was detected on the DOW JONES, announcing a stock market crash or a strong correction!
The "Head and Shoulders": Real success rates.Inverted Head and Shoulders: WATCH volumes when the neckline breaks!!
Here is what we can say about the success rate of the inverted head and shoulders pattern in trading:
-The inverted head and shoulders pattern is considered one of the most reliable chart patterns to anticipate a bullish reversal.
-According to some sources, the success rate of this pattern would be very high, with around 98% of cases resulting in a bullish exit.
-More precisely, in 63% of cases, the price would reach the price target calculated from the pattern when the neckline is broken.
-A pull-back (return to the neckline after the break) would occur in 45% of cases.
-However, it should be noted that these very optimistic figures must be qualified. Other sources indicate more modest success rates, around 60%.
-The reliability of the pattern depends on several factors such as respect for proportions, neckline breakout, volumes, etc. A rigorous analysis is necessary.
-It is recommended to use this pattern in addition to other indicators and analyses, rather than relying on it blindly.
In conclusion, although the inverse head and shoulders pattern is considered a very reliable pattern, its actual success rate is probably closer to 60-70% than the 98% sometimes claimed. It remains a useful tool but must be used with caution and in addition to other analyses.
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Head and Shoulders:
Here is what we can say about the success rate of the head and shoulders pattern in trading:
-The head and shoulders pattern is considered one of the most reliable chart patterns, but its exact success rate is debated among technical analysts. Here are the key takeaways:
- Some sources claim very high success rates, up to 93% or 96%. However, these figures are likely exaggerated and do not reflect the reality of trading.
- In reality, the success rate is likely more modest. One cited study indicates that the price target is reached in about 60% of cases for a classic head and shoulders pattern.
- It is important to note that the head and shoulders pattern is not an infallible pattern. Its presence alone is not enough to guarantee a trend reversal.
- The reliability of the pattern depends on several factors such as respect for proportions, the breakout of the neckline, volumes, etc. Rigorous analysis is necessary.
- Many experienced traders recommend using this pattern in addition to other indicators and analyses, rather than relying on it blindly.
In conclusion, while the head and shoulders pattern is considered a reliable pattern, its actual success rate is probably closer to 60% than the 90%+ sometimes claimed. It remains a useful tool but should be used with caution and in conjunction with other analyses.
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NB: In comparison, the classic (bearish) head and shoulders pattern would have a slightly lower success rate, with around 60% of cases where the price target is reached.
The “Fan Principle” is a powerful techniqueThe “Fan Principle” is a powerful technique in trading, using trendlines to predict price movements.
Highlights
📈 Powerful Technique: The Fan Principle is formidable in technical analysis.
📉 Identifying Points: Drawing trendlines from three key points.
🔴 Trading Signals: Buy or sell signals can be identified depending on the pattern.
📊 Practical Examples: Analyzing price movements on charts to illustrate the technique.
💰 Profit Opportunities: Strategies can result in significant gains, up to 22%.
🛑 Risk Management: Importance of placing stop-losses to protect investments.
🔍 Additional Resources: Detailed information and charts will be shared to deepen understanding.
Key Insights
📈 Technique Effectiveness: The Fan Principle helps identify clear trends using reference points, making the strategy both simple and effective.
📉 Importance of Confirmation: Validating trendlines with a third point builds confidence in trading signals, increasing the chances of success.
🔴 Warning Signals: Sell or buy signals, as shown in the video, can lead to strategic decisions based on historical analysis.
📊 Visual Analysis: Visualizing data on charts helps understand market movements, which is essential for technical analysis.
💰 Profit Potential: Trades based on the Fan Principle can provide significant profit opportunities, highlighting its effectiveness.
🛑 Protection Strategies: Placing stop-losses above resistance points is crucial to limit losses in the event of adverse market movements.
🔍 Access to resources: The information shared in the description and on other platforms offers ways to deepen the understanding of the technique and improve trading skills.
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The fan principle in trading is a strategy that consists of opening several positions on the same asset at different price levels. Here are the main aspects of this approach:
How it works
The idea is to open several positions (or "lots") on the same financial asset at different price levels, thus forming a "fan" of positions.
These positions are opened at points considered as potential market reversals.
The objective is to let these positions unfold like a fan or to close them gradually according to the evolution of the market.
Advantages
Risk diversification: By entering the market at different levels, the trader reduces the impact of a single bad entry.
Movement capture: This approach allows to take advantage of different phases of a price movement.
Flexibility: The trader can adjust his strategy by closing some positions while keeping others open.
Complementary Tools
The fan principle can be combined with other technical analysis tools to improve its effectiveness:
Fibonacci Fan: This tool automatically draws trendlines at key levels (38.2%, 50%, 61.8%) that can serve as entry points for fan positions.
Gann Angles: These lines, drawn at different angles (82.5°, 75°, 71.25°, etc.), can also help identify potential levels to open positions.
RSI (Relative Strength Index): Some traders combine the fan principle with the RSI to confirm entry points.
Important Considerations
This strategy requires good risk management, as it involves opening multiple positions.
It is crucial to set stop-loss and take-profit levels for each position in the range.
Using this approach requires a thorough understanding of the market and significant trading experience.
NVIDIA: Bearish: Possible Head and Shoulders: Warning!NVIDIA: Bearish: Possible Head and Shoulders: Warning!
Hello everyone The Wolf of Zurich has detected a possible "head and shoulder" on Nvidia, which would bring the price down to around $42.
I have also drawn a trend line that you absolutely must watch!
The level to watch is around $98-98
Here, watch your Fibonacci levels as well as your exponential mobile means
Have a nice day everyone
Some information to know about Nvidia:
Nvidia, the world leader in graphics chips and AI, is enjoying a flourishing situation despite a recent drop in its stock price.
Here is a summary of its current situation:
-Dominant position in the AI market
Nvidia occupies a quasi-monopolistic position in the field of chips for artificial intelligence. Its GPUs, especially the H100 series, are essential for the development of cutting-edge AI systems and are selling at high prices around the world.
-Stock market performance
Despite a recent 9.53% drop in its share price, Nvidia has posted an impressive 120% increase since the beginning of the year and nearly 400% over 3 years. This one-off drop does not seem to worry analysts, who still see significant growth potential.
-Technological innovations
Nvidia recently presented its new Blackwell GPU architecture, with the B200 and GB200 processors. These chips promise performance multiplied by 5 compared to the previous generation in the field of AI. The company also reassured investors by announcing that it had resolved the production problems initially encountered.
-Future Outlook
With its dominance in AI training chips and its comprehensive software ecosystem, Nvidia appears well positioned for continued growth. The company continues to innovate and strengthen its position in the AI market, which suggests a positive outlook for the future.
WALMART: Bearish: Overbought alert: Impact on Dow JonesWALMART: Bearish: Overbought alert: Impact on Dow Jones
Be careful with Walmart as you can see cocoa and st microelectronic also rose to very very high historical levels and look at the correction that we had immediately after at least 40% drop
This action can have a significant impact on the Dow Jones
A strong correction could lower the DJIA index
I alert you on this I alert you especially on the notion of "stock market cycle" and "seasonality"
Walmart is overbought you just have to look at your technical indicators RSI, ROC, Stochastic, exponential moving average, Ichimoku, Fibonacci retracement.
We could go much much lower so be careful this action is overbought
Monitor your above-mentioned indicators.
BITCOIN: Bearish – Head and Shoulders + Ascending WedgeBITCOIN: Bearish – Head and Shoulders + Ascending Wedge
Two classic Chartist figures were detected by the Wolf of Zurich:
1- An “ascending wedge” which would bring the price down towards $62,632.
2- A “Head and Shoulders” which would subsequently bring the price down to around $52,080.
The EMA.50 and 200 also remain potential targets
caution.
TESLA: Bullish: Inverted Head and Shoulders "in formation?! TESLA: Bullish: Inverted Head and Shoulders "in formation?! To watch
Concerning Tesla, as you can see, we are on the 38.2 Fibonacci of the decline from the historic high of $414 on November 4, 2021 to the low on January 6, 2023.
We are currently on the 38.2% Fibonaccio which is not a very high level; in the end. It is the "wolf of Zurich" who has detected a POSSIBLE "inverted head and shoulder" (inverted ETE); which if it becomes valid would give a first target around $245, then $275, and $307 (66% Fibonacci) and finally $400.
NB: I calculated all these levels in advance for you 'also thanks to Ichimoku.
So on an "inverted ETE" we are watching volumes and at the break of the "neckline" we enter the purchase, and we put our "stop loss" below the previous low, according to your currency management!
In addition, Tesla will also announce and present its robot taxi on October 10, 2024 so I think that at the macroeconomic level it will move.
Can you imagine such news, a presentation of the Tesla robot taxi, and nothing happens on the markets??!!!
I don't think so!!
However, if you currently want to short sell Tesla you can do so, and you can put a "Reverse stop" above the previous high, that is to say above the candle of August 16, 2024 around $234, for example.
Be careful on the markets
GOLD: Bullish - FLAG detected + Breakout of the range.GOLD: Bullish - FLAG detected + Breakout of the range.
1- A "Head Shoulders" has been detected and we did a perfect Take profit ( TP1) at 2 395$.
2- When we break a range the Take profit should be the Height of the range.
Then the TP2 is expected around 2 518$.
3- Plus we can also consider that the range is like a flag and then the TP3 ( green arrow) is expevted around 3 030$
The red horizontals are retracements regarding ICHIMOKU levels .
However a retracement Fibonacci gives a target lower around 2 100$.
Be careful
VIX SP500: BAT and SHARK possibleVIX SP500: BAT and SHARK possible
possibility of a harmonic figure "shark" and "bat" which would bring the price to the levels indicated on the chart.
In addition there is a divergence on the R.O.C and the RSI.
monitor the Fibonaccio and Ichimoku levels as well as the exponential moving averages 50 and 200
ETH: Bearish – BAT Detected + ROC DivergenceETH: Bearish – BAT Detected + ROC Divergence
The Wolf of Zurich detected a bearish “BAT” on Ethereum
We could therefore go up to around 3 270 3560
Then go back down to point C around the polarity zone of 1800-2035
The 50 and 200 exponential moving averages are still potential targets
In addition you will notice a divergence in the ROC between the price which is rising and the ROC which is flat
The ROC (Rate of change) gives you the speed of the asset's momentum.
Stay safe
BTC : 3 wedges to Monitor + Double TopBTC : 3 wedges to Monitor + Double Top
On the rise :
1 Falling wedge has been detected , and it could bring the price to 72 928 $
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On the decline :
We can see on my graph a "Double top" + 2 Falling wedges
Regarding the double top, the bitcoin can reach 48 000 $ minimum!
About the 2 wedges :
The potential targets can reach 56 425 which is a strong support to break
be safe
TESLA : Bullish - Butterfly-Wolfe Wave-Head Shoulders inverseTESLA : Bullish - Butterfly-Wolfe Wave-Head Shoulders inverse
A butterly was detected since several weeks
We have also a Head shoulders inverse
and a Wolf Wave Bullish
then the market can reach 207 and the 233 $
To monitor the EMA.50 and EMA.200 and ICHIMOKU "kijun"
NB : Divergences ROC and RSI , bullish
TSM : Bullish - "falling Wedge" and a "BAT" potential.TSMC detection of a "falling Wedge" and a "BAT" potential.
The price could rise and reach the gap upwards towards 147.25 then higher at 156.11
On the downside the market could go down to 135.92 then to 128.76 and finally to 125.27
Additionally, the RSI is divergent with the stock price §
be attentive and monitor the Ichimoku levels
US10Y: Bullish- Ascending triangle US10Y: Bullish- Ascending triangle
Ascending triangle detected on US10Y
The exponential moving averages remain possible targets
Monitor Ichimoku levels
The ROC ( Rate of Change) is in a positif territory.
Bonds can rise to a double top
Stay careful
Good trades to all
AXA: Bearish -DEEP CRAB detected.AXA: Lower-DEEP CRAB detected.
(1)
In Weekly:
A DEEP CRAB -Bearish was detected on AXA and was confirmed. Following this bearish harmonic pattern, a new BEARISH trend can potentially begin.
(2)
ROC and RSI: Note the Bearish divergence building up like dark clouds announcing a potential reversal on the horizon.
(3)
Detection of a SELL signal using ROC and RSI indicators;
Following this, I expect the market to move down to the 33.63 level, then 30.55, and finally towards the 29.49 and 25.84 levels, depending on the 50 and 200 EMAs.
BTC: Bearish - GARTLEY detected in WeeklyBTC: Bearish - GARTLEY detected in Weekly
The Wolf of Zurich has detected a "GARTLEY" and more precisely a "Harold McKinley GARLEY"!
Bitcoin could rise to $49,625 then fall back to $36,600 at the “nearest” level
and at the “lowest” around $18,900
PRZ zone lies between $19,000 and $36,300
The 50 exponential moving average "in Weekly" is around $33,900
The 200 exponential moving average is around $36,815 daily
There is therefore a high probability of going down to $36,800
Then Bitcoin could rebound after the “Halving” to $100,000 in the long term!
Happy trading to all
be careful
EUR/USD: Bullish - BAT + Cup with handleEUR/USD: Bullish - BAT + Cup with handle
According to the harmonic figures (D/W):
Bearish BAT detected!
the price could go down to 1.07033 / 1.05263 / 1.01124
On the Chartist level:
We are Bullish because in fact, the Wolf of Zurich has detected a cup with a handle or a cup of coffee.
The price could break the polarity zone around 1.12 and reach 1.25649.
The ROC is in divergence territory! And if it enters positive territory, the price can explode higher.
Monitor exponential moving means 50 and 200 in Monthly!!
Indeed, the 200 exponential moving average is around €1.16465.
According to ICHIMOKU (Weeekly):
A return to 1.05153 is possible
Be careful.
Happy trading to all