Oddly enough, but not only bulls and bears can be found in the market, but also a couple of cats and even a bat.
But don’t be afraid, these animals have come to help you make rich In the new year.
Let’s go!
The bat pattern.
The bat is a 5-point pattern that can indicate a bullish or bearish breakout.
How does it look like?
The pattern consists of five points:
X is the beginning, from this point the price makes a significant movement;
A-here the price is displayed, forming the first vertex;
B is a pullback, which can be 38% to 50% of the X – A move.
C is the price movement, which can range from 38% to 88% of the A – B movement. It is worth noting that C must not go above point A.
D is the price reversal, after move C. The shortest move of all other points. At this point we are looking for an entry in the trade, you can use the Fibonacci lines. The move from point D can be 88% of the move from XA, and it can go above point A.
Risk
The stop loss can be set below point D, but not below point X.
The CAT JUMP pattern.
This pattern is characterized by a strong move down and, with the right trade, it can bring huge profits.
How to find it?
The pattern appears in situations of strong movement, usually caused by bad news.
The following pattern will be observed on the chart:
1. A sharp drop in price, sometimes with a gap;
2. Reversal to the bottom line of the gap;
3. After which there is a long and sharp drop.
How to operate?
To begin with, you should find a strong drop with a gap, as it is correctly accompanied by strong volume.
After that we are waiting for a pullback to the bottom line of the gap and a reversal, this is where you can enter a deal.
Risk
The stop loss is placed above the lower parting line.
It is worth noting that from time to time the price can go above the lower separating line.
In rare cases, the price reaches the upper level of the gap and then falls.
It is important to note that the decline lasts from a month or more, so this pattern is used by long-term traders.
Important
It is worth remembering that there are alternative patterns: an INVERTED JUMP CAT and a BEARISH BAT PATTERN.
Both models work the same way, just in the opposite direction.
These figures are very profitable, with proper trading.
For example, a drop after a gap and reversal can be 50% or even 70%, in the JUMP CAT pattern.
Whichever pattern you trade, I wish you good luck and lots of profit in the new year.
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I’ll be happy
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