ES 3min from Mar 12
This was from yesterday's session, sequel to the 3 rising valleys .The pattern indeed developed into a cup with handle.
My habit has been to look for channels and broadening wedges to trade. In this case, the first thing I saw was the Ascending Broadening Wedge. By the time that a handle was formed, I was waiting for price to come down to touch the floor of the wedge for the 3rd time. Broadening wedge at day/year's low or at midway between high and low usually sees price hitting the ceiling of the wedge and breaking out after bouncing from its floor for the 3rd time.
Trigger candle will be the 3rd candle of the MSL. The only thing about the candlestick pattern (it's NOT an engulfing pattern aka outside bar) that suggests a bullish reversal is perhaps that the bullish candle is a marubozu. Get in 1 tick above the high of this candle, and trade all the way up to the ceiling of the channel. If you take a seed (highlighted in blue - refer to chart above) from the non active trading hours, you can usually expect a 261.8 to 423.6% run with this pattern (as seen on chart).
I usually will trade the pattern on the short side. I will go for the throw backs. Especially the 2nd one, after ES has formed a swing low, and then a double top, accompanied by a spinning top with long upper shadow. My kind of pattern.
I've briefly mentioned Keltner Channel before (re how I used it with the NYSE TICK when trading the TF). The chart above shows how it can be used with Fib ext. Note that the fib ext is for an upward move. Once fib 132.8 or 161.8 target has been hit, and price has traded out of channel, it's a sign of an exhaustion of the upward move. A short entry can be considered but only from the upper band of the channel. I usually will wait for price to move back into the channel (ie. usually the lower peak). Avoid shorting before price has hit at least 138.2 target, or before price has first gone out of the channel, coz it will make another attempt to do so, and that's usually when you're SELLING (been there).
Bollinger Band and Regression Bands should work the same way. I don't use BB coz it makes my chart look really ugly. The bulges and throttling and all. Just not pretty. If I'm staring at something for the most part of my waking hours, it cannot be UGLY!
That's why it's ok if D is.
MUAHAHAHAHA!!!!!
Trigger candle will be the 3rd candle of the MSL. The only thing about the candlestick pattern (it's NOT an engulfing pattern aka outside bar) that suggests a bullish reversal is perhaps that the bullish candle is a marubozu. Get in 1 tick above the high of this candle, and trade all the way up to the ceiling of the channel. If you take a seed (highlighted in blue - refer to chart above) from the non active trading hours, you can usually expect a 261.8 to 423.6% run with this pattern (as seen on chart).
I usually will trade the pattern on the short side. I will go for the throw backs. Especially the 2nd one, after ES has formed a swing low, and then a double top, accompanied by a spinning top with long upper shadow. My kind of pattern.
I've briefly mentioned Keltner Channel before (re how I used it with the NYSE TICK when trading the TF). The chart above shows how it can be used with Fib ext. Note that the fib ext is for an upward move. Once fib 132.8 or 161.8 target has been hit, and price has traded out of channel, it's a sign of an exhaustion of the upward move. A short entry can be considered but only from the upper band of the channel. I usually will wait for price to move back into the channel (ie. usually the lower peak). Avoid shorting before price has hit at least 138.2 target, or before price has first gone out of the channel, coz it will make another attempt to do so, and that's usually when you're SELLING (been there).
Bollinger Band and Regression Bands should work the same way. I don't use BB coz it makes my chart look really ugly. The bulges and throttling and all. Just not pretty. If I'm staring at something for the most part of my waking hours, it cannot be UGLY!
That's why it's ok if D is.
MUAHAHAHAHA!!!!!
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