EUR/USD pattern recognition: explained in detail

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It's not easy to predict a market turn. But knowing how to do it is an important part of trading.
Being able to accurately predict a market turn can:
Create big trades, at the point where new trends start
Help you get out of trades that have gone bad
Make you look cool at cocktail parties (LOL)
In this article, I'll show you my favorite ways to predict a market turn.
Method #1: Long-Term Divergence
My favorite method for predicting a market turn is to watch for divergence on the weekly and monthly charts.
Method #2: Multiple Missed Pivots
My favorite method for predicting a market turn is to look at missed pivots. Sometimes I lie awake at night and think about missed pivots. (Yes, I know I’m a weirdo).
A pivot point is an average price. A monthly pivot point is last month's high, low, and closing prices, added together, and then divided by three. Your charts can automatically calculate a monthly pivot.
A missed monthly pivot is not hit by price during the month that it is created.
The Rule: Watch for 2 or more missed monthly pivots in a row. Then wait for a trendline break or divergence to take the trade. Then let your friends wonder, "How did she see this turn in the market coming?"
Method #3: Yearly Pivots
You want to find huge market turns?
Look at yearly pivots.
Method #4: Pin Bar on a Weekly/Monthly Chart
You want to find reversals INSIDE of a trend? So that you can take bigger and better trend trades?
Look at pin bars on the weekly (or monthly) charts.
A pin bar is a candle formation that has a longer-than-average wick, and a small body. I'll explain why they're so powerful and how they're formed in just a moment. They're easy to find once you start looking for them.
NOTE: I am not a pin bar expert. I’m not a pinball expert. Keep in mind, as you read further, that you might have a different definition for a pin bar. That’s ok.
Pin bars happen all the time on short term charts (like 5 minute or tick charts). They don’t appear frequently on weekly or monthly charts. But when they do appear, they're awesome trend-continuation patterns.
The pin bar appears on top of the yearly pivot - this is (in my opinion) the absolute best way to trade a pin bar formation - right off a pivot, which acts as a springboard or launching pad for price.
Warning: Lots of traders argue about what constitutes a "true" pin bar. This sounds like the most boring argument in the world. I would rather shoot myself in the face than argue about pin bars. Here’s what I do to find them: I simply look for a candle with a long wick, much longer than recent wicks. And the wick must extend far outside of recent price action. And it must occur on top of or next to a long term pivot. That's all I care about.
Putting it All Together
Successful traders put multiple concepts together to create a personalized trading strategy.
Here's how you might approach trading major market reversals:
Pick a mix of 30-40 financial instruments from all market sectors and asset classes. You'll be looking at longer-term charts, so you'll need some energy, bonds, stocks, commodities, and currencies in the mix. ETFs can work great as proxies for commodities or stock sectors.
Pick a method you like, and stick with it. Maybe you like divergence + pivots. Great! Stay with it for at least six months or a year. Most traders change what they are doing so often, they never give a single method a chance to succeed.
Decide on a money management plan. I talk more about this in the course, but here's a short primer: Decide what your max risk will be on each trade, and place a protective stop on every trade, and never violate that stop-loss boundary. Then decide what amount of profit you'll target - and place a limit order to exit the trade at that price. Use a combination of break-even stops or trailing stops to protect your trade along the way.