{"id":8631,"date":"2010-04-19T13:04:58","date_gmt":"2010-04-19T17:04:58","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8631"},"modified":"2010-04-19T13:04:58","modified_gmt":"2010-04-19T17:04:58","slug":"raising-the-bar-bar-patterns-trading-opportunities","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/19\/raising-the-bar-bar-patterns-trading-opportunities\/","title":{"rendered":"Raising The BAR: Bar Patterns & Trading Opportunities"},"content":{"rendered":"

How a 3-in-1 formation in cotton “triggered” the January selloff<\/span><\/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, with a few secondary means of select technical studies. Such as: Bar Patterns. And Jeffrey counts one bar pattern in particular as his favorite: the 3-in-1<\/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 last three bars. When prices penetrate above the high — or — below the low of the set-up bar, it often signals the resumption of the larger trend. Where this breach occurs is called the “trigger bar.” On this, the following diagram offers a clear illustration:<\/p>\n

\"3-in-1\"<\/p>\n

Now, how about a real world example of the 3-1 formation in the recent history of a major commodity market? Well, that’s where the picture below comes in. It’s a close-up of Cotton from the February 5, 2010<\/span> Daily Futures Junctures. <\/em><\/p>\n

\"3-in-1<\/p>\n

As you can see, a classic 3-in-1 bar pattern emerged in Cotton at the very start of the New Year. Within a few day 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

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 reliable for impulse patterns. Since then a winning streak in cotton has carried prices to new contract highs.<\/p>\n

This example shows the power of a fully-equipped technical analysis “toolbox.” By using the Wave Principle with Bar Patterns, one has a solid, objective chance of anticipating the trend in volatile markets.<\/p>\n

And in a\u00a015-page report titled “How To Use Bar Patterns To Spot Trade Set-ups,”<\/a> <\/strong><\/span>Jeffrey Kennedy identifies the top SIX Bar Patterns included in his personal repertoire. They are Double Inside Days, Arrows, Popguns, 3-in-1, Reverse 3-in-1, and Outside-Inside Reversal.<\/p>\n

In this comprehensive collection, Jeffrey provides each pattern with a definition, illustrations of its form, lessons on its application and how to incorporate it into Elliott wave analysis, historical examples of its occurrence in major commodity markets, and ultimately — compelling proof of how it identified swift and sizable moves.<\/p>\n

Best of all is, you can read the entire, 15-page report today at absolutely no cost. You read that right. The limited “How To Use Bar Patterns To Spot Trade Setups”<\/span><\/strong><\/a> is available with any free, Club EWI membership.<\/p>\n

\n

Nico Isaac<\/em><\/strong> writes for Elliott Wave International, a market forecasting and technical analysis firm.<\/em><\/p>\n<\/div>\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, we’re not talking business casual versus sporty chic…<\/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-8631","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8631","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=8631"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8631\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}