If you were to use Schabackers definition of megaphone, this does not apply. You need 5 distinct swings and in this case, keeping it as objective as possible when talking about chart patterns which is difficult, they are not distinct and there is no price acceptance at the swings – as in strong closes.
The 5 distinct swings are :
1.- Low of Nov. 17.
2.- High of Nov. 22.
3.- Low of Nov. 24.
4.- Hign of Nov. 28.
5.- Low of Nov. 30.
—
Also note that a megaphone can be both continuation and reversal.
I agree. I read that most of the time they are reversal patterns. Is it true?
—
3 push pattern, you want to see some type of climatic move. One way to see it on this chart is to connect the lows of the first 2 pushes (Oct 11 & Oct 25) since we are looking at downside. Best scenario is you get a break of the trendline on the third push. This also ensures you are not just seeing a “pattern” but also the reason why such patterns exist in the first place. It does not happen here.
You are right. This chart does not qualify as a 3 push pattern.
In the book Street Smart (Laurence and Linda) they do not require such a “push”.
And they call their non-push, push-like pattern, Three Little Indians.
—
I do not use Fibs.
Why?
—
You have clearly shown you’ve done your homework in terms of tech analysis.
If doing my homework profits are just ok, can you imagine not doing my homework? … 🙂
—
Have you quantified any of your learnings over a large sample set using both true market data and random data?
No. I have only used true market data. Tell me, what’s the purpose of quantifying my learnings over random data?
—
My work is using not only commonly accepted market behaviors but also tested out over those sample sets.
Very intersting. Do you share the results of these tests with your subscribers?
I’m getting familiar with your website. Did I miss such results?
—
Most importantly of those two, tested out over large samples is the key.
Let me see if I got it … 1.- Tech analysis … 2.- Test over large samples … right?
—
Much convential wisdom is not accurate and does not prove out.
I concur.
—
There is an edge in this simple approach.
Is “testing over a large sample” the simple approach?
—
The box I drew was intentional because in simple terms, we are looking at consolidation. Consolidations at support instead of price rejection lean towards continued downside move. Think of the logic behind that statement.
You are correct. But wouldn’t you reserve the boxes for a type of consolidation where you could limit price action between a horizontal channel? I’m sorry. I’m still biased. I keep seeing a megaphone with 5 distinct swings. Maybe it’s not there.
—
Inside that consolidation, we have failed tests of the resistance zone with price falling back into the smaller range. This also leans towards bears.
“Lean towards bears”? … I already went long … Don’t jinx my trade … 🙂
—
The weekly chart showed momentum into support, did not break support but also was not rejected.
Yup. And this curbs my enthusiasm. I had an initial profit target in the vicinity of the 4th swing high (Nov.28), as the Wolffe Waves call for a test of the trend line from the 1st swing low (Nov. 17) to the 4th swing high (Nov. 28).
—
As we watch the daily chart, we want to see some type of action indicating which side the imbalance is.
I went back to the daily chart, and saw everything, but concluded nothing … what did you see?
—
You can see these either at the close on daily or smaller time frames – failed tests of lows/highs, breakouts of smaller ranges.
And did you see anything of interest?
—
I swing trade EOD so I generally stick to daily closes depending on the setup I am looking at.
Maybe I should start doing the same.
—
Thanks for participating!
My pleasure … 🙂
—
PS: Is there a way to upload pics, charts?
Is there any chance that you shouldn’t have drawn a rectangle, but a “megaphone” or “expanding triangle”.
This megaphone started on Nov. 17 and possibly ended on Nov. 30.
Also, this expanding triangle can be seen as a “Wolffe Wave” setup, or as “3 Little Indians”.
In any case, this seems to be a reversing pattern at previous support (May 25th), and just below the 38% Fibonacci retracement (2015 Low – 2017 High).
If you were to use Schabackers definition of megaphone, this does not apply. You need 5 distint swings and in this case, keeping it as objective as possible when talking about chart patterns which is difficult, they are not dictinct and there is no price acceptance at the swings – as in strong closes.
Also note that a megaphone can be both continuation and reversal.
3 push pattern, you want to see some type of climatic move. One way to see it on this chart is to connect the lows of the first 2 pushes (Oct 11 & Oct 25) since we are looking at downside. Best scenario is you get a break of the trendline on the third push. This also ensures you are not just seeing a “pattern” but also the reason why such patterns exist in the first place. It does not happen here.
I do not use Fibs.
You have clearly shown you’ve done your homework in terms of tech analysis. Have you quantified any of your learnings over a large sample set using both true market data and random data?
My work is using not only commonly accepted market behaviors but also tested out over those sample sets. Most importantly of those two, tested out over large samples is the key. Much convential wisdom is not accurate and does not prove out. There is an edge in this simple approach.
The box I drew was intentional because in simple terms, we are looking at consolidation. Consolidations at support instead of price rejection lean towards continued downside move. Think of the logic behind that statement.
Inside that consolidation, we have failed tests of the resistance zone with price falling back into the smaller range. This also leans towards bears.
The weekly chart showed momentum into support, did not break support but also was not rejected.
As we watch the daily chart, we want to see some type of action indicating which side the imbalance is. You can see these either at the close on daily or smaller time frames – failed tests of lows/highs, breakouts of smaller ranges. I swing trade EOD so I generally stick to daily closes depending on the setup I am looking at.
If you were to use Schabackers definition of megaphone, this does not apply. You need 5 distinct swings and in this case, keeping it as objective as possible when talking about chart patterns which is difficult, they are not distinct and there is no price acceptance at the swings – as in strong closes.
The 5 distinct swings are :
1.- Low of Nov. 17.
2.- High of Nov. 22.
3.- Low of Nov. 24.
4.- Hign of Nov. 28.
5.- Low of Nov. 30.
—
Also note that a megaphone can be both continuation and reversal.
I agree. I read that most of the time they are reversal patterns. Is it true?
—
3 push pattern, you want to see some type of climatic move. One way to see it on this chart is to connect the lows of the first 2 pushes (Oct 11 & Oct 25) since we are looking at downside. Best scenario is you get a break of the trendline on the third push. This also ensures you are not just seeing a “pattern” but also the reason why such patterns exist in the first place. It does not happen here.
You are right. This chart does not qualify as a 3 push pattern.
In the book Street Smart (Laurence and Linda) they do not require such a “push”.
And they call their non-push, push-like pattern, Three Little Indians.
—
I do not use Fibs.
Why?
—
You have clearly shown you’ve done your homework in terms of tech analysis.
If doing my homework profits are just ok, can you imagine not doing my homework? … 🙂
—
Have you quantified any of your learnings over a large sample set using both true market data and random data?
No. I have only used true market data. Tell me, what’s the purpose of quantifying my learnings over random data?
—
My work is using not only commonly accepted market behaviors but also tested out over those sample sets.
Very intersting. Do you share the results of these tests with your subscribers?
I’m getting familiar with your website. Did I miss such results?
—
Most importantly of those two, tested out over large samples is the key.
Let me see if I got it … 1.- Tech analysis … 2.- Test over large samples … right?
—
Much convential wisdom is not accurate and does not prove out.
I concur.
—
There is an edge in this simple approach.
Is “testing over a large sample” the simple approach?
—
The box I drew was intentional because in simple terms, we are looking at consolidation. Consolidations at support instead of price rejection lean towards continued downside move. Think of the logic behind that statement.
You are correct. But wouldn’t you reserve the boxes for a type of consolidation where you could limit price action between a horizontal channel? I’m sorry. I’m still biased. I keep seeing a megaphone with 5 distinct swings. Maybe it’s not there.
—
Inside that consolidation, we have failed tests of the resistance zone with price falling back into the smaller range. This also leans towards bears.
“Lean towards bears”? … I already went long … Don’t jinx my trade … 🙂
—
The weekly chart showed momentum into support, did not break support but also was not rejected.
Yup. And this curbs my enthusiasm. I had an initial profit target in the vicinity of the 4th swing high (Nov.28), as the Wolffe Waves call for a test of the trend line from the 1st swing low (Nov. 17) to the 4th swing high (Nov. 28).
—
As we watch the daily chart, we want to see some type of action indicating which side the imbalance is.
I went back to the daily chart, and saw everything, but concluded nothing … what did you see?
—
You can see these either at the close on daily or smaller time frames – failed tests of lows/highs, breakouts of smaller ranges.
And did you see anything of interest?
—
I swing trade EOD so I generally stick to daily closes depending on the setup I am looking at.
Maybe I should start doing the same.
—
Thanks for participating!
My pleasure … 🙂
—
PS: Is there a way to upload pics, charts?
Hope you don’t mind…..I extended our conversation to a blog post. It’s nice to have intelligent discussion.
https://forextradingstrategies4u.com/trader-talk/
Is there any chance that you shouldn’t have drawn a rectangle, but a “megaphone” or “expanding triangle”.
This megaphone started on Nov. 17 and possibly ended on Nov. 30.
Also, this expanding triangle can be seen as a “Wolffe Wave” setup, or as “3 Little Indians”.
In any case, this seems to be a reversing pattern at previous support (May 25th), and just below the 38% Fibonacci retracement (2015 Low – 2017 High).
If you were to use Schabackers definition of megaphone, this does not apply. You need 5 distint swings and in this case, keeping it as objective as possible when talking about chart patterns which is difficult, they are not dictinct and there is no price acceptance at the swings – as in strong closes.
Also note that a megaphone can be both continuation and reversal.
3 push pattern, you want to see some type of climatic move. One way to see it on this chart is to connect the lows of the first 2 pushes (Oct 11 & Oct 25) since we are looking at downside. Best scenario is you get a break of the trendline on the third push. This also ensures you are not just seeing a “pattern” but also the reason why such patterns exist in the first place. It does not happen here.
I do not use Fibs.
You have clearly shown you’ve done your homework in terms of tech analysis. Have you quantified any of your learnings over a large sample set using both true market data and random data?
My work is using not only commonly accepted market behaviors but also tested out over those sample sets. Most importantly of those two, tested out over large samples is the key. Much convential wisdom is not accurate and does not prove out. There is an edge in this simple approach.
The box I drew was intentional because in simple terms, we are looking at consolidation. Consolidations at support instead of price rejection lean towards continued downside move. Think of the logic behind that statement.
Inside that consolidation, we have failed tests of the resistance zone with price falling back into the smaller range. This also leans towards bears.
The weekly chart showed momentum into support, did not break support but also was not rejected.
As we watch the daily chart, we want to see some type of action indicating which side the imbalance is. You can see these either at the close on daily or smaller time frames – failed tests of lows/highs, breakouts of smaller ranges. I swing trade EOD so I generally stick to daily closes depending on the setup I am looking at.
Thanks for participating!