{"id":7180,"date":"2010-02-26T16:46:37","date_gmt":"2010-02-26T21:46:37","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7180"},"modified":"2010-02-26T16:46:37","modified_gmt":"2010-02-26T21:46:37","slug":"use-bar-chart-patterns-to-spot-trade-setups","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/26\/use-bar-chart-patterns-to-spot-trade-setups\/","title":{"rendered":"Use Bar Chart Patterns To Spot Trade Setups"},"content":{"rendered":"

Use Bar Chart Patterns To Spot Trade Setups
\nHow a 3-in-1 chart formation in cotton foresaw the January selloff<\/span>
\n<\/span><\/h3>\n

By Nico Isaac<\/span><\/h3>\n

For Elliott Wave International’s chief commodity analyst Jeffrey Kennedy, the single most important thing for a trader to have is STYLE<\/em>— and no, we’re not talking business casual <\/em>versus sporty chic<\/em>. Trading “style,” as in any of the following: top\/bottom picker, strictly technical, cyclical, or pattern watcher.<\/p>\n

Jeffrey himself is, and always has been, a “trend” trader; meaning: he uses the Wave Principle as his primary tool, along with a few secondary means of select technical studies. Such as: Bar Patterns. And, of all of those, Jeffrey counts one bar pattern in particular as his absolute, all-time favorite: the 3-in-1<\/span><\/strong>.<\/p>\n

Here’s the gist: The 3-in-1 bar pattern occurs when the price range of the fourth bar (named, the “set-up” bar) engulfs the highs and lows of the preceding three bars. When prices move above the high or below the low of the set-up bar, it often signals the resumption of the larger trend. The point where this breach occurs is called the “trigger bar.” On this, the following diagram offers a clear illustration:<\/p>\n

\"\"<\/strong><\/p>\n

For a real-world example of the 3-1 formation in the recent history of a major commodity market, take a look at this close-up of Cotton from Jeffrey Kennedy’s February 5, 2010, <\/span>Daily Futures Junctures. <\/em><\/p>\n

\"\"<\/strong><\/p>\n

As you can see, a classic 3-in-1 bar pattern emerged in Cotton at the very start of the new year. Then, within days of January, the trigger bar closed below the low of the set-up bar, signaling the market’s return to the downside. Immediately after, cotton prices plunged in a powerful selloff to four-month lows.<\/p>\n

Then February arrived and with it, the end of cotton’s decline. In the same chart, you can see how Jeffrey used the Wave Principle to calculate a potential downside target for the market at 66.33. This area marked the point where Wave (5) equaled wave (1), a common relationship. Since then, a winning streak in cotton has carried prices to new contract highs.<\/p>\n

What this example tells you is that by tag-teaming the Wave Principle with Bar Patterns, you can have a higher objective chance of pinning the volatile markets to the ground.<\/p>\n

To learn more, read Jeffrey Kennedy’s exclusive, free 15-page report titled “How To Use Bar Patterns To Spot Trade Set-ups,”<\/a><\/strong><\/span> where he shows you 6 bar patterns, his personal favorites.<\/p>\n

Nico Isaac<\/em><\/strong> writes for Elliott Wave International, a market forecasting and technical analysis firm.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By Nico Isaac – For Elliott Wave International’s chief commodity analyst Jeffrey Kennedy, the single most important thing for a trader to have is STYLE– and no…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-7180","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=7180"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7180\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=7180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=7180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=7180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}