Why is it better??
Youâre absolutely correct defiance. 
Hard to give an exact answer without being able to redraw the pattern myself. But i totally agree with you if B retraces to the 0.786 lvl it would be a butterfly. A nice double top as a nice non-aggresive entry as well.
Much more user friendly in every way. To many things to explain. If you have a PC i would suggest you get a demo account with FXCM and give it a try yourself. For me itâs just easier to adjust everything and it has a much smoother and cleaner look than MT4 which makes the trading much more enjoyable.
My strategy is just to trade advanced patterns. The ones i have included in my trading plan for now are the bat pattern, cypher pattern and the gartley pattern. Nothing else.
I do not use the MSRT lines since i still need more input from TMB on how to identify the right ones. Eagerly waiting for his tutorial.
I do not trade every pattern i see. I always need at least one other indication as confirmation as i mentioned the other day. This can be RSI overbought/oversold, RSI divergence, support resistance levels, even handles/numbers (psychological/institutional levels), etc).
Thats about it to be honest. Summary: Advanced patterns with at least one confirmation.
My trading plan is very precise even though iâm still working on it. I guess itâs something that will always develop through the trading career. Iâve tried to make it as compact as possible and itâs about four A4 pages in size. I would like to share it with you but i think it will help everyone in here more not to do that since the learning progress is very important. I think everyone needs a personal approach to the market and copying anything and just using it without adopting to your personality wonât do you any good. If you need an example of a trading plan to get started just google âforex trading planâ or look at the trading plan TMB posted in the beginning of this thread.
I canât point this out enough but itâs really important to really create your own plan, style and strategy when trading. Of course you can implement information created by others, like the advanced pattern rules for instance. But in the end you need to decide what fits you and your personality best and build a trading strategy/plan around that from scratch.
I really need to find my way as I trade very very messy. I will go back on babypips on âDeveloping your own trading planâ chapter - I think I have easily overlooked that important area in the school.
Thanks, Diablo!
Sounds great cosminc! Without a trading plan you are just taking trades based on your current mood and mindset on a specific day. And as you point out that will get very messy and you wont be able to produce a consistent profit.
I think a solid, personality based trading plan and good money management are the most important parts in forex trading. The rest is a mix of psychology, discipline, patience and trading strategy.
Thanks for the corrections, I see my mistakes now on the prior chart.
Here is another chart. I see a standard Gartly pattern forming, but for some reason I cannot get my âDâ leg to line up with the rules. AB retraces XA 61.8 and BC retraces AB 88.6. Since BC retraces 88.6 that indicates my CD leg should end at 161.8, but that does not line up with the 78.6 retracement of XA. Can anyone Help?
Also, the charts I am posting are 2000 tick ES charts. I tried to color code my fibs as I was drawing them. I also trade FX.
Quick question about butterfly patterns. Does the AB leg have to retrace to .768 of XA or can it retrace less or more?
For it to be a valid butterfly B should, like you say be a 0.786 retracement. If itâs less you are looking for a gartley or bat pattern instead. I do not think there is a harmonic pattern where B is a 0.886 retracement. At least i do not know of any.
Sometimes you do not get any fib confluences at the anticipated level. You get more like âzonesâ where price is likely to react to. Once again i cannot redraw your pattern but if you are looking for a gartley see if there is anything else lining up with the 78,6% level. I think you still have to wait for the C point to form first. This maybe turns into a big ABCD move instead and price continues up. Until a clear C and the start of a CD leg has formed itâs hard to tell.
This is another Cypher pattern which is the past results. Just for practice. But dono is it correct or not.
B form at the 38.2 retracement of XA leg. (But B donât really hit 38.2). With C form at least 127.2 of XA leg. D will be at 78.6 retracement of XC leg. Is it this analysis correct?
Iâm not diablo and i have not drawn in fibs myself on the chart but at a glance at your chart i think in that particular case it looks like yes D may indeed land on the 78.6 XA, but as we can clearly see there the price plouged right through the 78.6% of your XA. reasons for this can vary, like your X not being the correct extreme point, or simply the pattern failing due to low convergance of fibs, or it may be a fakeout which found momentary resistance at the 78.6% and then soon ploughed through, âŚor simply the pattern failing by chance.
to see if perhaps the price found momentary resistance at the 78.6% of XA perhaps look at a lower timeframe like M5 and observe the candels.
edit: actually scratch what i said above. itâs unlikely to of ever been a gartley since the initial AB leg landed almost on the 78.6% of XA. when the initial AB leg lands this close to the 78.6% then it is more likely to be a butterfly than a gartleyâŚ
and in this case, it did not turn into a butterfly eitherâŚ
Thanks defiance. Im still learning to find the pattern. Hope can learn more from you all. And 1 more thing, can you tell me the rules for butterfly, gartley and cyphers?
this should be of some use to you as a rough guide.
also a few pages back I posted a detailed link to information on the Cypher. Iâm not sure how much pages back exactly my post is as this topic is quite active âŚbut the post with the link is probably within the last 10 pages.
also diablo has a fair bit of experience with the cypher so ask him too if necessary.
[B]edit:[/B] Sometimes the [B]gartleys[/B] can have slightly differant retracements to the one in the picture though.
For example. sometimes the initial AB leg of XA will land of the 38.2%,
if the price has a 38.2% pullback and then resumes itâs current direction this indicates a strong trend is in place. If the price after continuing up a little bit [not past the A] has yet another pullback resulting in the D landing on the 50% of XA, then this means due to a gartley completing in a strong trend, that the price now has an 80% chance of reaching the 127% of CD. This means, these types of Gartleys can potentially be more profitable than the more average gartley which has an initial AB retracement of 61.8% of XA
Iâd be interested in seeing this drawn out. Do you have a diagram showing what youâre explaining?
sorry, i donât have a diagram of this, but the gartley structure would look similar to the gartley diagram in my last post, but just with differant fib levels.ie: B being a 38.2% retracement of XA (instead of the standard 61%) and D being a 50% retracement of XA (instead of 78.6%)
after the price hits D and bounces the other way, it will have an 80% chance of reaching 127% of CD
Hey guys,
Interesting discussion you are having. 
Since the first gartley pattern was born i think many have made a lot of adjustments to it and changed it. I do not think there is a right or wrong gartley.
Google the gartley and you will find different retracement levels.
For example, this is the gartley i am trading and the D point for me always is at the 78,6% of XA.
If you google âgartley 222 patternâ you can find this drawing with different retracement levels for B, C and D.
If you use the second gartley 222 drawing i posted you cannot name or trade a bat pattern since a pattern with a B retracement of 50% of the XA leg also is a gartley for you even if it completes at the 88,6% of XA. I hope you get my point.
Of course itâs up to everyone to decide which pattern to trade and what retracements to use. What i want to say is that there is no right or wrong. Itâs all depending on your own backtesting and the information you collect regarding which strategy, pattern or plan is the most profitable. And that also depends on where you place your stops and take profit points so itâs very subjective and difficult to pinpoint something thats working for everyone. Regarding the pattern shane posted, i would call it a gartley and if i would have traded it i would have entered at the 78,6% retracement of XA. Since i place my stops below/above X this one would have been a winning trade for me. Not a nice trade since the pattern not got respected but it would still have been profitable. I will get back later or tomorrow explaining in more detail what i mean. If someone else with another trading plan and money management plan would have traded it maybe it would have been a loosing trade and a failed pattern. I hope you understand what iâm trying to say.
By the way. For those of you who still are struggling with the cypher pattern, here is the drawing i made of it myself with the retracement levels. This is a bullish pattern and for the bearish one just turn it around. 
Keep in mind that for it to be a valid cypher, A has to touch the 1.272 extension of XA but must not close below/above the 1.414 extension, B has to touch the 0.382 retracement of XA but must not close below/above the 0.618 level.
Talk to you guys later. Have a nice eastern and be nice to the easter bunny. 
For some reason the forum is not letting me quote myselfâŚ
But I have just remembered an example of such a Gartley I was describing. In the original TMB video he had an initial AB retracement of 38.2%, and D landed on 50% of XA,