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Chapter 17, Part IV. 3-Drive pattern and harmony in classical patterns. Page 5

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Advanced comments - compounding of Harmonic patterns

    We will start from the following chart:

    Chart #4 | 60-min EUR/USD

    Do you see something here?

    Pipruit: I don’t know, may be some AB=CD’s… Wait a minute, I see Butterfly!
    Commander in Pips: I’m very happy that you see it. But I’m not your psychotherapist. He-he-he. *Snortle*

    Ok, this is the same chart of 3-Drives pattern, but without markings…

    Pipruit: I can’t believe it.
    Commander in Pips: Now you know that to recognize some patterns is not so easy task at all. But the purpose of this chart is different. We know that this chart shows a 3-Drives pattern. But let’s see from which it consists of on chart #5:

    1. First drive and start of a second are 1.27 Butterfly “Sell”;

    2. Second and third drives are another 1.27 Butterfly “Sell”;

    3. Both Butterflies, as we already know have inner AB=CD’s;

    4. Then 3-Drive pattern itself, that also includes larger AB=CD, which overlap both Butterflies. This could be seen on chart #2.
    Pipruit: Sir, this is just amazing! But how we can apply that?​

    Commander in Pips: First, when you do not even think, that 3-Drive could appear – you can trade first Butterfly with a nice profit – so you ride on first drive.

    Second, if you even could not recognize 3-Drives, you can act, based on the second butterfly alone. Since it has the same target as 3-Drive and the same stop placing level – for you there will not be difference to trade this butterfly or 3-Drive.

    And the last but most important thing - just imagine that you have at least 3 patterns that point on the same level for short entry – Butterfly (second), large AB-CD and 3-Drives. What are your thoughts then?

    Pipruit: Well, I will have a lot of confidence to enter.
    Commander in Pips: Bulls eye! This is a great advantage. This kind of compounding analysis will allow you to find some nuances which could give you much more confidence. Because when many patterns point on the same level – this is not just occasion.

    But it not necessary always will be like on chart #5. Sometimes it could be two butterflies without holding 3-Drives, or different AB=CD, “222” or something.

    Chart #5 | 60-min EUR/USD 3-Drives pattern compounding
    #1 Sive Morten, Dec 21, 2013
    Lasted edited by : Apr 14, 2016
    TOURADA likes this.
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