|Pwninobrian ||Dec 29, 2019 1:11am | Post# 48959 |
Hey, so I'm a new member and it won't let me start a new thread so hopefully this is an appropriate place for this. So Scott Carney kind of talks about them but never really explains in very clear detail what they are and other than seeing them form on Autochartist where there is no explanation as to how they decide what is a valid pattern, I've been able to find 1 other piece of information about them and it was on Thinkorswim and they worded the explanation in such a way that I hate to admit it but I don't understand their explanation, I feel like it's extremely vague, so here comes my ultimate question what is a 3-point extension? I basically tried to reverse engineer the ones identified by autochartist but so far they have identified valid patterns with three different Fib extension ratios and for the life of me the only way I can think to analyze the structure is to take a Fib of the short AB leg but that is not the correct way of finding them so can someone please explain what a Fib Extension is? Thinkorswim says "A bearish 3 Point Extension is recognized if:
- The segment AB is a retracement to the bottom followed by an uptrend segment BC.
- The price difference between A and B is about 61.8% of the price difference between C and B."
But I don't understand what a "retracement of the bottom" means since it doesnt mean taking a fib reading of the AB leg. Like could someone explain to me which tool on tradingview you would use and how you woulud use it exactly?
Seems like there are several different viable ratios for these ecept the one thing I've found in common is if I take a retracement from C to B then point A is at 0.618 but I'm too fried to figure out how to apply that to figuring out how these work