Birth of New Trend Tipple Entry Harmonic Pattern Trading

Applying Turing Point Prediction in Forex Market

In this article, we provide an explanation on how to apply the turning point prediction in Forex Market. Here we will be using Swing Size and Swing Age variable to identify the turning point probability for each price swing.

1. Swing Age is the count of candle bars from latest bar to the swing right end.
2. Swing Size is the count of candle bars from the swing right end to swing left end

As these two variable provides you the relative coordinate of the right end and left end of the price swing, you can locate the turning point value for each price swing. Check the screenshot to clarify your understanding.
In terms of application, the turning point prediction is useful as it quantifies your risk for trading between 0.0 and 1.0 (or 100%). Quantification in your trading is always good because you have something to stick as a guidance for your trading. When you do not have the guidance, you will often find that your emotion will ruin your trading.
There are two basic concepts in regards to the probability and some advanced concepts in regards to Mother Wave and Child Wave. For your own good, everyone should understand the basic concepts if you want to improve your trading performance in long run.
In the first basic concept, if the price reaches the turning point probability above 0.7 (or 70%), in this turning point probability range, you can look for the potential reversal opportunity. In another words, it is the good point to detect the directional change in the market. It could be either correction or global turning point.
In the second basic concept, if the price reaches the turning point probability between 0.0 and 0.5 (or 50%), you can find the good breakout opportunity. In another words, it is the good point to detect the continuation in the price movement. We will omit the advanced concepts here as it was already explained elsewhere.
If you do not have an access to the Turning Point Prediction, then it is fine as we provide the Turning Point Prediction for Forex Market for free. Anyone can access the standard turning point prediction for your day trading for free of charge from the link below.
https://algotrading-investment.com/2...r-day-trading/
At the same time, if you want to have the scanner for the MetaTrader 4 or MetaTrader 5, here is the links to Fractal Pattern Scanner. In Fractal Pattern Scanner, you can access the turning point probability scanner + mother wave breakout signals, reversal signals, and many more advanced features.
https://www.mql5.com/en/market/product/49170
https://www.mql5.com/en/market/product/49169
https://algotrading-investment.com/p...ttern-scanner/

Forex Market Analysis with Artificial Intelligence telling the breakout trading opportunity. Sit back and enjoy the presentation delivered by Artificial Intelligence Forex Market Analyst for Your Day Trading.
We try to produce the useful videos for Forex trader more often. Please subscribe to the YouTube Channel if you wish to receive the immediate alert when we upload new forex market prediction video.

https://youtu.be/KzIacVFHYd0

Attached Image (click to enlarge)

New Article – Insignificant Turning Point, Local Turning Point and Global Turning Point

Here is another article explaining some useful concept for your Forex and Stock Market Trading. Of course, this is free article to improve your trading performance. The article explain what are the insignificant turning point, global turning point and local turning point when you trade with reversal trading setup.
https://algotrading-investment.com/2...turning-point/
In addition, you can also have an access to important free articles for your trading here.
https://algotrading-investment.com/2...ing-education/
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There are several class of technical analysis useful to pick up the turning point. For example, Harmonic Pattern and Elliott Wave Patterns are one of them. Here is the list of few Harmonic Pattern Indicator available in MetaTrader 4 and MetaTrader 5.
Harmonic Pattern Plus (and also Harmonic Pattern Scenario Planner) is the repainting but non lagging Harmonic Pattern Scanner. You can get them for the affordable price. Below is links for them.
https://www.mql5.com/en/market/product/4488
https://www.mql5.com/en/market/product/4475
https://algotrading-investment.com/p...-pattern-plus/
X3 Chart Pattern Scanner is non repainting and non lagging Harmonic Pattern, Elliott Wave pattern and X3 pattern Scanner. Below is links for them.
https://www.mql5.com/en/market/product/41993
https://www.mql5.com/en/market/product/41992
https://algotrading-investment.com/p...ttern-scanner/
In addition, you can watch the YouTube Video to feel what is the automated harmonic pattern indicator like. For your information, we provides two YouTube videos with title and links below.
YouTube “Harmonic Pattern Indicator”:
YouTube “Non Repainting Non Lagging Harmonic Pattern Indicator”:

Manual For Pair Trading Station

Pair Trading Station is a powerful MetaTrader Indicator. Its decision making algorithm is based on Pairs trading (a.k.a Statistical arbitrage or spread analysis). This manual was written already few years ago for our Pair Trading Station. I think this is still very useful if your trading is based on correlation and spread. This is pdf manual, so please download it into your hard drive and read them. Below is the link to the pdf manual:
https://algotrading-investment.com/2...g-station_ati/
In addition, you can watch this YouTube Video titled as How to use Pairs Trading Station

Here is the landing page for Pairs Trading Station in MetaTrader 4 and MetaTrader5.
https://algotrading-investment.com/p...ading-station/
https://www.mql5.com/en/market/product/3303
https://www.mql5.com/en/market/product/3304

Turning Point Prediction for Forex Trading

Fractal Pattern Scanner provides the ability to predict the turning point in the financial market. In this article, we provide the practical guide line on how to use the provided turning point prediction for your day trading. The turning point prediction consists of two prediction types. The first one is the prediction of trough. In the trough prediction, we are trying to predict the possible bullish turning point while the price is falling. The second one is the prediction of Peak. In peak prediction, we are trying to predict the possible bearish turning point while the price is rising. The turning point prediction is useful because it tells us the complete story of the price series. For example, it will provide you the visual guidance of price movement + it will also provides the probability information. It is a true hybrid of statistical prediction and technical analysis. As a trader, we can manage the entry and exit with the turning point prediction. Another advantage is that the probability provides us the opportunity for the second level of decision making. This is in fact the important part because many other technical indicator miss to provide the probability information, which we can use for the more advanced level of decision making. With ability to read these probability, practically we can use these turning point prediction to decide the price action in the financial market. They are the good predictor of the price movement assuming you are not misusing the probability information.
Here are the breakdown of the price action with the turning point prediction. We also provide the screenshot to explain each peak and trough cases with some visual aid. As you can see from the screenshot, we can respectively draw two price action for each peak and trough prediction.
When We Predict the Peak:
1. Possible bullish breakout trading opportunity at low probability area
2. Possible bearish reversal trading opportunity at high probability area
When We Predict the Trough:
1. Possible bearish breakout trading opportunity at low probability area
2. Possible bullish reversal trading opportunity at high probability area.
Probably, guessing of these price actions is so natural during the turning point prediction. The screenshot below is for you to confirm your understanding. If the term of peak and trough is not familiar to you, then google some physics articles explaining Peak and Trough in wave cycle. We are using the identical term here as we do not want to reinvent the wheel again. Once, you understand the cycle with peak and trough in those articles, it would be much easier to project the action items for your trading with this article too. In my opinion, the turning point prediction is in its unique position between the statistical prediction and technical analysis. Probably we can consider it as the hybrid of both world. We will recommend you enjoying this scientific advancement for your trading.
For example, you can watch this video titled as “Breakout Trading vs Reversal Trading – Turn Support & Resistance to Killer Strategy” to understand how to control the market timing with this probability tool.
YouTube:

Below is the landing page for Fractal Pattern Scanner in MetaTrader version.
https://www.mql5.com/en/market/product/49170
https://www.mql5.com/en/market/product/49169
https://algotrading-investment.com/p...ttern-scanner/

Mean Reversion Supply Demand

We provide many sophisticated trading system in our website to construct the sound portfolio in your investment and to increase your capitals in your trading. Mean Reversion Supply Demand is the powerful Supply and Demand Zone indicator you can use in your collection in Forex and Stock market trading.
With the built in Market Profile indicator, the tool provide flexible and accurate control of your entry and risk management especially around the significant trading zone in your chart.
Highly automated feature can help you to readily set your profit target and even more sophisticated analysis in your chart. For your winning trading, this is the must have tool.
https://www.mql5.com/en/market/product/16851
https://www.mql5.com/en/market/product/16823
https://algotrading-investment.com/p...supply-demand/

Turning Point in Pairs Trading

Pairs trading is a market-neutral strategy that involves buying one asset and shorting another. Pairs trading or the similar trading principle is often employed by the hedge funds and institutional investors. Like value investing and the economic data, the pairs trading explains the occurrence of the turning point well. Therefore, if you have the working knowledge of the pairs trading, it could help you to use price pattern better. At the same time, with pairs trading, we can still apply the margin of safety and spread we have learnt from the value investing strategy. Hence, it is the good trading strategy to be covered in this book.

Pairs trading starts with identifying a pair of assets that are believed to have some long-run equilibrium relationship. When the spread has diverged sufficiently, the strategy will buy the undervalued asset and sell the overvalued asset. The strategy achieves a hedging or risk neutral state by taking two assets at the same time in different direction. Pairs trading strategy is applicable to both Forex and Stock market. The process of the pairs trading can be summarized into the following four steps.

 

1. Identify two assets whose prices have moved together historically in long term.
2. Calculate the correlation, co-integration, historical spread between two assets.
3. When the spread between two assets are diverged excessively high, then buy the undervalued asset and sell the overvalued asset.
4. When the spread is reverting back to normal range, close the positions of the two assets to take the profit.

https://algotrading-investment.com/w...the-bottom.png
Figure 2-3: Normalized AUDUSD vs EURUSD on the top and spread chart on the bottom (Chart: www.algotrading-investment.com, Optimum Chart)

Except the spread is measured between two assets, the trading principle of the pairs trading is similar to the value investing. For example, the pairs trading involves to recognize the unusual high spread between the two highly correlated assets whereas the value investing involves to recognize the unusual high spread between the intrinsic value and the stock price. Hence, the unusual high spread provides the margin of safety in the pairs trading. In another words, if the spread is higher, then it favours our positions more but with less risk. Typically, the trader applies the statistical knowledge in picking the spread limit to trigger the entry. For example, as in the standard deviation, the spread 3 might be the bottom line to consider the entry. However, the choice of the spread limit to trigger trading could be varying for different assets. Sometimes the historical spread of some assets shows that the spread 4 is the appropriate choice for the spread limit. Sometimes, the historical spread of some assets shows that the spread 3 is the appropriate choice for the spread limit. To choose the right spread limit, it is best to inspect the historical spread first in the chart. However, to provide you some rule of thumb guideline, for the stock market, spread 4 or over might be considered to trigger the entry. For the Forex market, the spread 3.5 or over might be considered to trigger the entry. As the pairs trading shares common ground with statistics, some people call the pairs trading as the statistical arbitrage. As in the margin of safety in the value investing, the higher spread between two assets, the absolute spread in fact, can be considered as the higher margin of safety.
Since the pairs trading involves to take the positions for two assets, this provides some of its own properties, which is different from other strategy. For example, we could provide two illustrative examples when the positions are closed with profits. These two illustrative examples are not necessarily the exhaust list of scenarios for the movements of two assets. However, we have selected them as they can visualize the process of the formation of the turning point better than other scenarios.
For the first example, consider that we bought the one asset with low price and sold another asset with high price when the spread was diverged sufficiently high. In this example, the asset with low price (=Symbol B) could make the bullish turning point to reach the price level of another asset because they are supposed to move together in long run. We are in profit due to the sharp rise in the asset with low price (=Symbol B) after the bullish turning point.

https://algotrading-investment.com/w...read-chart.png
Figure 2-4: Normalized EURUSD vs GBPUSD on the top and spread chart on the bottom (Chart: www.algotrading-investment.com, Optimum Chart)

In the second example, the asset with high price (=Symbol B) could make the bearish turning point to reach the price level of another asset because they are supposed to move together in long run. We are in profit due to the sharp fall in the asset with high price (=Symbol B) after the bearish turning point.

https://algotrading-investment.com/w...read-chart.png
Figure 2-5: Normalized CADJPY vs EURJPY on the top and spread chart on the bottom (Chart: www.algotrading-investment.com, Optimum Chart)

From the two illustrative examples, we could draw two useful trading principle. Firstly, when the spread is sufficiently high, it is possible to have a turning point between two assets. The bullish turning point could happen to the asset with low price or the bearish turning point could happen to the asset with high price. As in value investing, the pairs trading provides an explanation to the formation of the turning point in the financial market. Secondly, taking the opposite positions on two assets reduce the risk of the market volatility. This is considered as the hedging or the risk neural strategy. Since we are holding one position in opposite direction to other position, we are exposed less on the market volatility. Although hedging is an optional practice only, you never know if you like or dislike such a trading principle. If you do not understand the hedging effect, you might open a Forex demo or simulation account for an educational purpose. Search two highly correlated assets. Then buy one and sell the other. Monitor the profits and loss of the two assets for some time.
In the Forex market, since you can enter the sell position as well as the buy position, the pairs trading can be applicable. The pairs trading can be applicable to the stock trading too. If the pairs trading strategy provides the high spread between two stocks in your portfolio, then you can sell the stock in your portfolio and buy more on the other stock in your portfolio. If the pairs trading strategy provides the high spread between one stock in your portfolio and the other stock outside your portfolio, then you can sell the stock in your portfolio and buy the new stock for your portfolio. Since the spread in the pairs trading is calculated in real time, it can be considered as the quantitative trading strategy. This helps us to trade with less emotion. In addition, the price pattern can be combined with the pairs trading strategy to improve their performance. In that case, the margin of safety in the pairs trading could be applied to confirm the direction of the price pattern. However, there are some disadvantages for the pairs trading too. For example, this technique might be more complicated than other trading strategy. Firstly, they could be more complicated because the technique involves dealing with two assets at the same time. Secondly, they could be more complicated because the technique requires some knowledge of statistics and statistical trading.

About this Article
This article is the part taken from the draft version of the Book: Science Of Support, Resistance, Fibonacci Analysis, Harmonic Pattern, Elliott Wave and X3 Chart Pattern. Full version of the book can be found from the link below:
https://algotrading-investment.com/p...monic-pattern/
You can also use Pairs Trading or Spread Analysis in MetaTrader to accomplish your technical analysis. Here is the landing page for Pairs Trading Station in MetaTrader 4 and MetaTrader5.
https://algotrading-investment.com/p...ading-station/
https://www.mql5.com/en/market/product/3303
https://www.mql5.com/en/market/product/3304
Below is the landing page for Optimum Chart, which is the standalone tool to scan the trading opportunities for all symbols and all timeframe in one button click.
https://algotrading-investment.com/2...optimum-chart/

Volume Spread Analysis Indicator List

We provide three different Volume Spread Analysis indicators and volume based tools. Our volume spread analysis tools are the hybrid of volume spread analysis and signal processing theory.
These tools will help you to complete your trading decision with high precision. As long as you understand the concept of the Accumulation and Distribution area in the volume spread analysis, these tools will help you to predict the presence of Accumulation and Distribution area. Hence, you can predict the best trading opportunity.
Firstly, Volume Spread Pattern Indicator is the powerful volume spread analysis indicator that operated across multiple timeframe. Volume Spread Pattern Indicator will not only provide the bearish and bullish volume spread pattern in the current time frame but also it will detect the same patterns across all timeframe. You just need to open one chart and you will be notified bullish and bearish patterns in all timeframe in real time.
Here is the link to Volume Spread Pattern Indicator.
https://www.mql5.com/en/market/product/32961
https://www.mql5.com/en/market/product/32960
https://algotrading-investment.com/p...ern-indicator/
Secondly, Volume Spread Pattern Detector is the light version of Volume Spread Pattern Indicator above. This is free tool with some limited features. However, Volume Spread Pattern Detector is used by thousands of traders. Especially, it works great with the support and resistance to confirm the turning point. This is free tool. Just grab one.
https://www.mql5.com/en/market/product/28438
https://www.mql5.com/en/market/product/28439
https://algotrading-investment.com/p...tern-detector/
Both Volume Spread Pattern Indicator and Volume Spread Pattern Detector works well with Excessive Momentum indicator as Excessive Momentum indicator helps to detect the potential Accumulation and Distribution area automatically. Hence, if you are using Excessive Momentum Indicator, then you can use one between Volume Spread Pattern Indicator or Volume Spread Pattern Detector. In addition, we provide the YouTube video to accomplish the basic operations of Excessive Momentum Indicator.
YouTube Video (Excessive Momentum Indicator):
YouTube Video (Excessive Momentum Indicator Explained):
Here is link to Excessive Momentum Indicator for MetaTrader 4 and MetaTrader 5.
https://algotrading-investment.com/p...tum-indicator/
https://www.mql5.com/en/market/product/30641
https://www.mql5.com/en/market/product/30621
Thirdly, we provide the volume Zone Oscillator. This is another useful free tool that utilizes the volume information for your trading. You can use these tools for volume spread analysis, Harmonic Pattern, Elliott Wave Pattern, X3 Price Pattern further. This is free tool. Just grab one.
https://algotrading-investment.com/p...ne-oscillator/

Must Read Articles for Professional Harmonic Pattern Trader

Here is the short but insightful article for Harmonic Pattern Trader. This article will explain type of Harmonic Pattern indicators and the technology around the harmonic pattern detection algorithm. If you are professional trader, then you must read these three articles before trading with them.
1) Turning Point and Trend: https://algotrading-investment.com/2...int-and-trend/
2) Pattern are good predictor of Market Turning Point: https://algotrading-investment.com/2...turning-point/
3) Harmonic Pattern Indicator Types: https://algotrading-investment.com/2...dicator-types/
Throughout these articles, we also emphasize the importance of estimating true success rate for harmonic pattern to build the winning trading strategy.
Also below we provide the links for the automated Harmonic Pattern Detection indicator.
4) Harmonic Pattern Scenario Planner
https://www.mql5.com/en/market/product/6101
https://www.mql5.com/en/market/product/6240
https://algotrading-investment.com/portfolio-item/harmonic-pattern-scenario-planner/
5) X3 Chart Pattern Scanner
https://algotrading-investment.com/portfolio-item/profitable-pattern-scanner/
https://www.mql5.com/en/market/product/41992
https://www.mql5.com/en/market/product/41993

Scan Supply Demand Zone Across All Timeframe

In Ace Supply Demand Zone indicator, you can scan the supply and demand zone across all timeframe for your Forex trading. This is a powerful feature included in Ace Supply Demand Zone indicator. Controlling the Multiple Timeframe scanning is similar to our other MetaTrader products like Harmonic Pattern Plus or X3 Chart Pattern Scanner. You can control them from the inputs under the Multiple Timeframe Scanning. With the inputs, you can enable or disable multiple timeframe scanning. You can also choose to switch on or off specific timeframe from your dashboard. In addition, you can also control how frequently the indicator should scan. The default value for update frequency is M5 timeframe. However, you can use M1 for update frequency if you need to scan them more frequently.
If you enabled email or push notification in the inputs under General Setting, then you can also receive the alert for the detected supply and demand zone as well as the touched supply and demand zone. The thing you need to understand about multiple timeframe scanning is that it requires multiple computation too per each timeframe. The computation can be heavier up to 7 times or more when you enabled M1 to D1 timeframes. Hence, due to data loading issues, the calculation might be stuck sometimes. In that case, just click Show button to refresh all the calculation. Of course, it is possible to switch off the multiple timeframe scanning if you only want to trade one timeframe.

Ace Supply Demand Zone in MetaTrader 4 and MetaTrader 5
In addition, we provide the YouTube video for Ace Supply Demand Zone Indicator. Hence, you can watch this YouTube Video to learn the basic operation with the supply demand zone indicator.
YouTube “Supply Demand Zone Indicator”:
Landing page for Ace Supply Demand Zone.
https://www.mql5.com/en/market/product/40076
https://www.mql5.com/en/market/product/40075
https://algotrading-investment.com/p...y-demand-zone/

Rolling Ball Effect and Harmonic Pattern Trading

We use turning point strategy because of their high reward/risk ratio. Higher rewards/risk ratio means relatively lower winning rate comparing to other lower rewards/risk trading setup. As an extreme example, in scalping, you can achieve over 90% of winning rate if you have the target profit of 1 pip against 20 or 30 pips risk. However, it does not mean that scalping is better technique than other strategies. With scalping, you have to increase frequency of trading to achieve the same profit level as other techniques do. In addition, few losing trades will risk your account quickly. In harmonic pattern trading, higher rewards/risk ratio will reduce your winning rate dramatically. It is hard to say exact winning rate. Roughly, your chance to be successful is somewhere between 10% and 60%. Of course, it can be higher depending on your discipline and rewards/risk ratio. When we trade with turning points, we can be wrong many times. However, few winning trades will offset your loss and will offer you profits. Several losing trades will never impose a lot of pressure on your account when you are taking reasonable risk for each trade. Turning point strategy has nice operating characteristics for trader. Unlimited profit range is the key merit on why the turning point strategy is loved by many traders (Figure 11-1). In addition, the required frequency of trading is much less than other trading strategy. This sort of strategy will fit to the life style of many of us. Having said that, many traders do not understand the skills and discipline required for turning point strategy. In essence, the key to apply successful turning point strategy is reducing number of losing trades.

https://algotrading-investment.com/w...to-others..png
Figure 11-1: Profit range of turning point strategy compared to others.


To reduce number of losing trades and to increase your winning rate, you must understand the rolling ball effect. What is rolling ball effect? To explain the rolling ball effect in harmonic pattern context, let us start with some example of bullish harmonic patterns. We will be using bullish trading example thoroughly in this chapter. For selling case, please turn the logic explained here the other way around.

https://algotrading-investment.com/w...the-slope..png
Figure 11-2: Schematic diagram of rolling ball on the slope.

Most of time the bullish turning point will come after heavy selling period. In the case of global turning point, it would come after intensive selling (Figure 11-3). In the case of continuation and local turning point, the turning point will come after some selling (Figure 11-4). When we look back this in chart, it seems everything is ok. However, if we are standing at the time before the turning point happens, this is not fun to be honest. Especially we have just sent some large buying orders when all bearish investors think this might be suiciding. Even in this fearful moment, we still do this because we know that there are people waiting to enter buy when price is sufficiently discounted. However, this is only half of our equation.
To win, you have to understand the other half of equation. The other half of equation is that it is not easy to stop the rolling ball on the slope as shown in Figure 11-2. Even the rolling ball reaches end of the slope, we cannot expect the rolling ball to be stopped right at the end because the rolling ball has the built up momentum in the rolling direction. Instead, it usually takes several hard attempts to stop them or they will role until they lose all the momentum by the friction of surface and air and other obstacles on its way. This rolling ball effect is the typical cause behind the failed harmonic patterns. Less sophisticated trader does not see this rolling ball effect. They are almost careless about the built-up momentum of the selling market. If you miss this point, you will be joining the 90/90/90 club, 90% of the traders losing 90% of their money within 90 days.

https://algotrading-investment.com/w...-pressure..png
Figure 11-3: Global turning point example after heavy selling pressure.

https://algotrading-investment.com/w...t-example..png
Figure 11-4: Local turning point example.

To deal with this rolling ball effect, sometimes, you can employ the multiple entry technique for harmonic pattern trading. In multiple entry technique, you will split your order into two or three smaller. At first, you will open first entry with the order size of half or one third of one full order. Then you will monitor how the market is responding. If market is going down further, this means that the rolling ball effect is still not cleared yet. As price is going down further, the harmonic pattern can fail. During this process, this might be losing trade or this might be breakeven if you are skilled. At the same time, you have to check if the market is showing some intent to become bullish or not for your future second entry. If the market showed some intent to become bullish, then you can wait for the second opportunity. It is important to have sufficient price distance between your first and second entry though. Second entry must be well below outside the Pattern Completion Interval of the first entry to account for the rolling ball effect. If we meet the turning point in our first entry, it is the best scenario. In such scenario, make sure that you are using maximum profit range to account for the reduced position size. Even if our first entry did not go well, we still have the second chance. Now, you might be wondering how many entries are recommended in multiple entry. Typically, two is recommended and three is the maximum I can suggest. If you split your order into too many pieces, then you profit size is getting smaller too. I do not recommend going over more than three typically. Two is good choice and three is the maximum.

https://algotrading-investment.com/w...D-pattern..png
Figure 11-5: Multiple entry demonstration with AB=CD pattern.

Sometimes, there are people doing exactly opposite to multiple entries recommended here. That is they are taking multiple exits. For your information, multiple exit technique can not deal with the rolling ball effect if the entry of two orders are identical. Multiple exits with same entry isn’t efficient technique because the end result is more or less the same with single entry with the averaged take profit between two take profits. For example, some trader sets two take profits at 0.381 and 0.618 Fibonacci projected level from D point. The results of this will become close or identical to one take profit at 0.500 Fibonacci projected level in long run. I do not recommend this sort of multiple exit setup. However, if you must do this sort of multiple exit setup, then I recommend using Potential Continuation Zone, instead of simple Fibonacci projection. Potential Continuation Zone, introduced in this book, is much better predictor of turning point after the D point is confirmed. Hence, you can use two Potential Continuation Zone sensibly to place your two take profit targets. In addition, if you are going to employ two orders, try to differ the entries to account for the rolling ball effect. If you are differing the entries of the two orders, then it will become the multiple entry technique we have been explaining here.

https://algotrading-investment.com/w...D-pattern..png
Figure 11-6: Multiple exit demonstration with AB=CD pattern.


https://algotrading-investment.com/w...gure-11-4..png
Figure 11-7: Single exit setup equivalent to multiple exit setup in Figure 11-4.
About this Article
This article is the part taken from the draft version of the Book: Guide to Precision Harmonic Pattern Trading (Mastering Turning Point Strategy for Financial Trading). This article is only draft and it will be not updated to the completed version on the release of the book. However, this article will serve you to gather the important knowledge in financial trading. This article is also recommended to read before using Harmonic Pattern Plus, Harmonic Pattern Scenario Planner and X3 Chart Pattern Scanner, which is available for MetaTrader or Optimum Chart.
Below is the landing page for Harmonic Pattern Plus, Harmonic Pattern Scenario Planner and X3 Chart Pattern Scanner in MetaTrader. All these products are also available from www.mql5.com too.
https://algotrading-investment.com/p...-pattern-plus/
https://algotrading-investment.com/p...nario-planner/
https://algotrading-investment.com/p...ttern-scanner/

Below is the landing page for Optimum Chart (Standalone Charting and Analytical Platform).
https://algotrading-investment.com/2...optimum-chart/

Equilibrium Process (Trend)


https://algotrading-investment.com/w...the-table..png
Figure 6-1: Equilibrium process is corresponding to price pattern (2, 1), (3, 1) and (4, 1) in the table.

Simply speaking, Equilibrium process is conceptually similar to trend. It is the market force moving the price series in one direction. Equilibrium process is not different from the equilibrium concept found in the classic supply-demand economic theory. Literally, it is the force to move price to release the unbalance between supply and demand. There are many types of Equilibrium process (trend). They might be linear trend like Pattern (2, 1) in Figure 6-2 or they might be nonlinear trend like Pattern (3, 1) and (4, 1) in Figure 6-2. The three trend patterns, that are linear, exponential and damped, are common. Exponential trend (3, 1) represents the strong trend with increasing momentum. Damped trend (4, 1) represents the trend with reducing momentum. Figure 6-2 presents the six trend patterns for both bullish and bearish markets. These six trend patterns are found most frequently in the financial market comparing to other trend patterns.

https://algotrading-investment.com/w...sh-market..png
Figure 6-2: Trend Patterns for bullish and bearish market.

Equilibrium process is highly related to market fundamentals. Equilibrium process is the direct representation of the supply demand balance in the financial market. Assuming there is the fixed number of shares for Google, if more people want to buy a stock than sell it, then the share price for Google will move up. We call this as a bullish trend. Likewise, if more people want to sell a stock than buy it, there would be greater supply than demand and the price would fall. We call this as a bearish trend. When there is the imbalance in supply and demand force, then the price will try to move towards equilibrium to release the imbalance. The supply demand imbalance is often caused by the fundamental change in the market. For example, change in the taxation or interest rate can change the quantity of supply and demand force dramatically. Natural disasters like Earthquake or Hurricanes or other serious transmissible diseases can influence the dynamics of supply demand too in the financial markets. War, terror, or other political corruption can reduce the demand of the financial assets affected by them.
https://algotrading-investment.com/w...and-curve..png
Figure 6-3: Economic Supply Demand curve.

If the Equilibrium process (trend) is overwhelmingly dominating in the price series, prediction is easier. However, the strength of Equilibrium process differs for different financial price series. It is also not easy to quantify or to isolate the portion of Equilibrium process from rest of regularities perfectly. In reality, Equilibrium process can be caused by multiple information sources introduced in different time (Figure 6-4). Each information source will be diffusing across the market in time. Some of them are slowly and some of them are quickly. Some information source will introduce bullish Equilibrium process, which increase demand and reduce supply. Some other information source will introduce bearish Equilibrium process, which reduce demand and increase supply. Since each trader and investor will react differently to different information sources, the diffusion process of each information source can vary dramatically. Modelling or visualization of diffusion process of multiple information sources is complex. If there are many bullish and bearish Equilibrium process acts together in the price series, the simplest way of guessing the market direction is calculating the net of bullish and bearish equilibrium process in the market. However, with simple netting, you will still miss the time factor because each information source will be diffused in different speed. Another difficulty comes from quantifying bullish and bearish strength of each source. Typically, to quantify them correctly, we need good amount of historical data. Especially if you need the accuracy for trading quality, you will need much more data than just doing some academic research. To most of average trader, this is not accessible.

https://algotrading-investment.com/w...a-Release..png
Figure 6-4: EURUSD candlestick chart with various Fundamental Data Release.

Therefore, trader uses technical indicator because technical indicator is simple alternative to the complex diffusion process modelling. Moving average type of technical indicators can work well for this type of market because they eliminate randomness and leave the trend pattern in the price series. Simple moving average, exponential moving average and zero lag moving average can be the great help for this type of market. Normally the strong Equilibrium process can be captured with typical momentum trading strategy. For example, all moving average cross over strategy will work well. In this type of market, following trend is wiser than using the counter trend trading strategy. The real question is “Can we have such a simple market we can trade with moving average alone”? If so, we will be very lucky. Most of time, the financial market will show more complex behaviour, which will be introduced in later chapters. However, in some stock market, you might be able to find few easy opportunities. In Forex market, I think there is not so much opportunity to win with moving average indicator alone.

https://algotrading-investment.com/w...portunity..png
Figure 6-5: Moving Average Cross over strategy. Fast simple moving average is cross over slow simple moving average for buy opportunity.
https://algotrading-investment.com/w...portunity..png
Figure 6-6: Moving Average Cross over strategy. Fast simple moving average is cross down slow simple moving average for sell opportunity.
About this Article
This article is the part taken from the draft version of the Book: Scientific Guide to Price Action and Pattern Trading (Wisdom of Trend, Cycle, and Fractal Wave). Full version of the book can be found from the link below:
https://algotrading-investment.com/p...ttern-trading/
You can also use Ace Supply Demand Zone Indicator in MetaTrader to accomplish your technical analysis. Ace Supply Demand Zone indicator is non repainting and non lagging supply demand zone indicator with a lot of powerful features built on.
https://www.mql5.com/en/market/product/40076
https://www.mql5.com/en/market/product/40075
https://algotrading-investment.com/p...y-demand-zone/

Below is the landing page for Optimum Chart (Standalone Charting and Analytical Platform).
https://algotrading-investment.com/2...optimum-chart/

Fractal-Wave Process

https://algotrading-investment.com/w...the-table..png
Figure 8-1: Fractal-Wave process is corresponding to price pattern (1, 5) in the table.

Fractal-Wave process is the representation of the Fractal geometry in the time dimension. Fractal geometry is made from a repeating pattern at many different scales. Simply speaking it is repeating patterns with varying size. Fractal geometry can be a self-similar pattern with the strictly same patterns across at every scale. Or if the pattern loosely matches to the past one, this can be still considered as fractal geometry. We call this as near self-similarity against the strict self-similarity. Many examples of Fractal geometry can be found in nature. Snowflakes, coastlines, Trees are the typical example of the Fractals geometry in space. Fractal-Wave is the fractal geometry generated in time dimension. Just like Fractal Geometry can be described by self-similar patterns. Fractal-Wave can be described by self-similar patterns repeating in time. The concept of Fractal-Wave can be illustrated well by Weierstrass function.
Loosely speaking, Weierstrass function is the cyclic function generated from infinite number of Cosine functions with different amplitude and wavelength. By combining infinite number of Cosine functions, it can generate a complex structure repeating self-similar patterns in different scales. This is a typical synthetic example of Fractal-Wave patterns with strict self-similar patterns. We present this function to help you to understand the properties of the self-similar process. The real world financial market shows the loose fractal geometry. They do not repeat in the identical patterns in shape and in size. The repeating patterns are similar to each other up to certain degree. Since Weierstrss function is the synthetic example for the strict fractal geometry, reader should note that Weierstrss function does not represent the real world financial market.


https://algotrading-investment.com/w...e-process..png
Figure 8-2: Weierstrass function to give you a feel for the Fractal-Wave process. Note that this is synthetic Fractal-Wave process only and this function does not represent many of real world cases.

In the real world application, Fractal-Wave process appears with the near self-similar patterns most of time. Therefore, detecting them is not easy. The Heart Beat Rate signal is one typical example of the Fractal-Wave process in nature (Figure 8-3 and Figure 8-4). If we zoom in on a subset of time series, we can see the apparent self-similar patterns. In Financial Market, Fractal-Wave process occurs frequently but the market typically shows the near self-similarity too. In terms of pattern shape, the financial market and Heart beat rate signal are different because their underlying pattern generating dynamics inside human organ and crowd behaviour are substantially different.

https://algotrading-investment.com/w...t-al-2000..png
Figure 8-3: Self-similar process in Heart Beat rate (Goldberger et al, 2000).

https://algotrading-investment.com/w...me-series..png
Figure 8-4: Continuous Heart Beat time series.
https://algotrading-investment.com/w...ly-series..png
Figure 8-5: Self-similar geometry in EURUSD daily series.

Fractal-Wave process is the basis for many popular trading strategies like Elliott Wave, Harmonic patterns, triangle and wedge patterns. However, these trading strategies were not well connected to existing science in the past. This was one of the important motivation for myself to step up to write and to connect these trading strategies into existing science. Most of time, day traders were referencing that these strategies will work because market repeats themselves. For me, this explanation would be not enough before I make the full time commitment on them.
Therefore, I had to do a lot of research to find the origin of these trading strategies and to see real value behind them. From my research, most likely, the repeating patterns in these strategies come from Fractal-Wave. I was very happy initially until I found that there is big difference between the underlying concepts of these trading strategies and Fractal-wave itself.
To see the difference, you might compare the heart beat signal and EURUSD price series in Figure 8-4 and Figure 8-5. You could also compare the heartbeat signal and S&P 500 series in Figure 8-6. With heart beat signal in Figure 8-4, you might think that it would look similar to Stock or Forex market data but different in some ways. If you felt this way, you are very correct. Here is the main difference.
Heartbeat signal seems to have fixed mean or horizontal patterns as we described in Stationary process in Chapter 5. However, EURUSD price series or S&P 500 series do not show any noticeable horizontal patterns. With human, the heartbeat increases dramatically to get more blood out during intensive activity like sprinting, but they must come back to normal range to maintain our life. Naturally, this makes up the horizontal patterns as we described in Stationary process. On the other hands, the operational range of the financial market does not have to create the horizontal patterns as if heartbeat does. Firstly, financial market is designed to grow or decline with time (Figure 8-6). Secondly, the underlying fundamental drives the rise and fall of the financial market (Figure 8-6) towards unknown destination.

With human, we know that our heartbeat rate must be kept between 60 and 100 times per minute. While you are a living man, this normal range is the destination of your heartbeat rate most of time. It is very predictable that your heartbeat will come back to 80 times per minute once it hits 130 times per minute. In the financial market, the final destination is not known and open. Even if S&P500 hits 3000 points tomorrow, we are not sure if it would even come back to 1000 points next year or ever. Hence, we are talking about similar but very different type of Fractal-Wave. Fractal wave alone can not explain the difference between these two. In the past, many day traders were having misleading picture between fractal wave and these trading strategies because no one or no literature attempted to give clear or easy explanation on them. This was another motivation for me to write this book too.
The open and unknown destination of the financial market is there because the underlying fundamental drives the market towards the price level, at which majority of people think it is most reasonable. In another words, market will move towards the equilibrium price. We have covered this in Equilibrium process in Chapter 8. Financial market is not only made up from Fractal-Wave but with Equilibrium process too. Hence, this is why financial market is different from heartbeat series although both have fractal wave in them. We have just pinned down the important concept of Equilibrium Fractal Wave process. In next two chapters, we will take you to the details of Equilibrium Wave process and Equilibrium Fractal Wave process to give you the complete and systematic view of the trading strategy and financial market.



https://algotrading-investment.com/w...-70-years..png
Figure 8-6: S&P 500 growth last 70 years.


Analytical Note
In the Fractal Geometry, two important quantifiable properties are fractal dimension and self-similarity. Fractal dimension is a measure of how much an N dimensional space is occupied by an object. For example, a straight line have dimension of 1 but a wiggly line has a dimension between 1 and 2. More precisely, their Fractal Dimension can be expressed as Log (N)/Log (r) where N = number of self-similar pieces and r = linear scale factor. Now to illustrate the concept, we will present the four cases from dimension 1 to 2. If we reduce size of straight line by linear scale factor r = 2, then then we get two self-similar piece, N = 2. Therefore, the dimension of the straight line is 1.
https://algotrading-investment.com/w...mension-1..png
Figure 8-7: Iteration of self-similar process for straight line (Dimension = 1).

Likewise, if we remove the middle third of the straight line and replace it with two lines with the same length, then we get the first iteration of the Koch Curve. In this example, for the linear scale factor r = 3, we get the four self-similar pieces. Therefore, the dimension of Koch Curve is 1.26816 = Log (4) / Log (3).

https://algotrading-investment.com/w...n-1.26816..png
Figure 8-8: Iteration of self-similar process for Koch Curve (Dimension = 1.26816).

Sierpinski Triangle is another good example of Fractal Geometry. If we connect the mid points of the three side inside an equilateral triangle, then we get 3 equilateral triangles inside the first equilateral triangle. Note that we do not count the resulting upside down triangle as a self-similar piece. In this case, the linear scale factor r is 2 since generated triangle have the half of the width and height. The Fractal dimension D = 1.585 = Log (3)/ Log (2).

https://algotrading-investment.com/w...ion-1.585..png
Figure 8-9: Iteration of self-similar process for Sierpinski Triangle (Dimension = 1.585).

Finally consider a square. For the linear scale factor r = 2, we will get four squares inside the first one. Therefore, our fractal dimension for a square is D = 2 = Log (4) / Log (2). Even we make the linear scale factor r = 3, we still get the same Fractal dimension D = 2 = Log (9) / Log (3). As we have illustrated in the four examples, Fractal Dimension generalize the topological integer dimensions to a fraction. Higher the fractal dimension means that the fractal geometry to occupy more space in the dimension. Therefore, a square have the Fractal Dimension 2 as the smaller square fits larger one without leaving any empty space. If our fractal geometry is kept removing space, then we could get the Fractal Dimension less than 1 too.

https://algotrading-investment.com/w...mension-2..png
Figure 8-10: Iteration of self-similar process for square (Dimension = 2).



About this Article
This article is the part taken from the draft version of the Book: Scientific Guide to Price Action and Pattern Trading (Wisdom of Trend, Cycle, and Fractal Wave). Full version of the book can be found from the link below:
https://algotrading-investment.com/p...ttern-trading/

Advanced Price Pattern Scanner uses highly sophisticated pattern detection algorithm. However, we have designed it in the easy to use and intuitive manner. Advanced Price Pattern Scanner will show all the patterns in your chart in the most efficient format for your trading. It is non repainting pattern detector. Below are the links to Advanced Price Pattern Scanner.
https://algotrading-investment.com/p...ttern-scanner/
https://www.mql5.com/en/market/product/24679
https://www.mql5.com/en/market/product/24678

Below is the landing page for Optimum Chart (Standalone Charting and Analytical Platform).
https://algotrading-investment.com/2...optimum-chart/

Elliott Wave Trading

Below articles will provide a guide to count Elliott Wave using scientific approach. Applying the scientific approach helps to reduce the subjectivity involved in Elliott Wave counting. Hence, you can reproduce your trading outcome over and over.
● Introduction to the Wave Principle
https://algotrading-investment.com/2...ave-principle/
● Scientific Wave Counting with the Template and Pattern Approach
https://algotrading-investment.com/2...tern-approach/
● Impulse Wave Structural Score and Corrective Wave Structural Score
https://algotrading-investment.com/2...uctural-score/
● Channelling Techniques
https://algotrading-investment.com/2...-elliott-wave/
https://algotrading-investment.com/w...Analysis-1.png


About this Article

This article is the part taken from the draft version of the Book: Scientific Guide to Price Action and Pattern Trading (Wisdom of Trend, Cycle, and Fractal Wave). Full version of the book can be found from the link below:
https://algotrading-investment.com/p...ttern-trading/

Elliott Wave Trend is extremely powerful indicator. Allow you to perform Elliott wave counting as well as Elliott wave pattern detection. On top of them, it provides built in accurate support and resistance system to improve your trading performance. You can watch this YouTube Video to feel how the Elliott Wave Indicator look like:

Here is the landing page for Elliott Wave Trend.
https://www.mql5.com/en/market/product/16479
https://www.mql5.com/en/market/product/16472
https://algotrading-investment.com/portfolio-item/elliott-wave-trend/

Introduction to Equilibrium Fractal Wave Analytics

EFW Analytics was designed to accomplish the statement “We trade because there are regularities in the financial market”. EFW Analytics is a set of tools designed to maximize your trading performance by capturing the repeating fractal geometry, known as the fifth regularity in the financial market. The functionality of EFW Analytics consists of three parts including:
1. Equilibrium Fractal Wave Index: exploratory tool to support your trading logic to choose which ratio to trade
2. Superimposed Pattern Detection as turning point analysis
3. Superimposed Channel for market prediction with Golden ratio expansion
4. Superimposed Channel for market prediction with whole number expansion
5. Equilibrium Fractal Wave (EFW) Channel detection
6. Superimposed Channel Rating (Higher rating = higher predictive power)
EFW Analytics provide the graphic rich and fully visual trading styles. In default trading strategy, you will be looking at the combined signal from Superimposed pattern + EFW Channel or Superimposed pattern + Superimposed Channel. In addition, you can perform many more trading strategies in a reversal and breakout mode. You can also run two different timeframes in one chart to enforce your trading decision. Sound alert, email and push notification are built inside the indicator.
Below is the link to the EFW Analytics:
https://algotrading-investment.com/p...ave-analytics/
https://www.mql5.com/en/market/product/27703
https://www.mql5.com/en/market/product/27702

New Version of X3 Chart Pattern Scanner Coming For MetaTrader 4 and MetaTrader 5

In version 8.71, we reinforced the zone concept in X3 Chart Pattern Scanner. Zone is the extended concept from the Horizontal Support and Resistance in technical analysis. Zone is the great tool to decide your trading entry and exit as well as managing your risk and reward. Since we understand the importance of the zone concept, we provide the reinforced version of the Pattern Completion Interval for Harmonic Pattern and X3 Chart Pattern in the new version of X3 Chart Pattern Scanner. As before, you can lock this trading zone for the multiple timeframe analysis. New version is both applicable to both MetaTrader 4 and MetaTrader 5 products. Please download the latest version of X3 Chart Pattern Scanner from the link below.
Link to X3 Chart Pattern Scanner Download Page.
https://www.mql5.com/en/market/product/41993
https://www.mql5.com/en/market/product/41992
https://algotrading-investment.com/p...ttern-scanner/

Mean Reversion Supply Demand Basic Guideline

Supply and Demand zone is the extended version of support and resistance trading with more skills. We provide our own Supply and Demand Zone indicator, Mean Reversion Supply Demand.
Here is the really basic guideline in using Mean Reversion Supply Demand.

1. H4 = Zone detected in H4 timeframe
2. S3 = Zone Strength 3

You can also show or hide zones from your chart using button click.
Below are the links to the Mean Reversion Supply Demand indicator for MetaTrader 4/MetaTrader 5.
https://www.mql5.com/en/market/product/16823
https://www.mql5.com/en/market/product/16851
https://algotrading-investment.com/p...supply-demand/

Support and Resistance

As a trader, I can not emphasize enough about the importance of support and resistance. Support and resistance is the most popular technical analysis tool in the world of trading. Furthermore, the concept of support and resistance are the basis of many advanced trading strategies too. In fact, many of the advanced trading strategies taught in this book including Harmonic Pattern and Elliott Wave are also partly based on the concept of support and resistance. If you do not have good understanding over the support and resistance, it is recommended staying away from the day trading. Many educational materials do mention about support and resistance but in brief. Different textbooks only discuss them in several different angles and it is difficult to find some unified language talking over the support and resistance. Many book will suggest that support and resistance consists of three or more points touching the same line. On the other hand, some book might mention that support and resistance are the respective levels that you should watch out for your trading. They are correct. However, comparing to its mega popularity, most of the textbook provide the very brief description only. As in the Fibonacci analysis, support resistance is another technique lacks with scientific relevance. In this book, we will use the concept of the Equilibrium Fractal-Wave to visualize the price action around the support and resistance. At the same time, the visualized price action can be further used to derive entry and exit for your trading. In addition, we will show you several important classes of support and resistance for your trading. To visualize the price action around the support and resistance, we use the Peak Trough Transformation with ZigZag indicator. We use the free Peak Trough Analysis tool from the website: www.algotrading-investment.com.
● Horizontal Support and Resistance
https://algotrading-investment.com/2...nd-resistance/
● Diagonal Support and Resistance
https://algotrading-investment.com/2...nd-resistance/
● Identification of Support and Resistance with the Template and Pattern Approach
https://algotrading-investment.com/2...tern-approach/
About this Article
This article is the part taken from the draft version of the Book: Scientific Guide to Price Action and Pattern Trading (Wisdom of Trend, Cycle, and Fractal Wave). Full version of the book can be found from the link below:
https://algotrading-investment.com/p...ttern-trading/
You can also use Ace Supply Demand Zone Indicator in MetaTrader to accomplish your support resistance analysis. Ace Supply Demand Zone indicator is non repainting and non lagging indicator with a lot of powerful features built on. Especially, you can use it like the horizontal support and resistance for your trading as well as the direction prediction trading strategy.
https://www.mql5.com/en/market/product/40076
https://www.mql5.com/en/market/product/40075
https://algotrading-investment.com/p...y-demand-zone/
Turning Point Probability and Trend Probability can be measured with Fractal Pattern Scanner at every price action in your chart. The turning point probability can improve the accuracy of trading with horizontal support and resistance. You can watch this YouTube video how you can turn the support resistance into the killer strategy with the turning point probability in Fractal Pattern Scanner.
Below is the landing page to Fractal Pattern Scanner in MetaTrader 4 and MetaTrader 5.
https://www.mql5.com/en/market/product/49170
https://www.mql5.com/en/market/product/49169
https://algotrading-investment.com/p...ttern-scanner/

Beat Corona Virus Together Discounts for MetaTrader

Since December 2019, we have observed the loss of lives due to this COVID-19 pandemic. Apart from this, COVID-19 has severely demobilized the global economy. Many of the affected countries have undergone the complete lock down. Life after the COVID 19 is tough for the entire society. We never knew that this will last this long.
During this Covid19 pandemic, we hope everyone is safe and well from this Corona Virus Crisis. We know this affect the whole world. Hence, we provide 50 USD discounts on the six MetaTrader 4 and six MetaTrader 5 products.
Discounted price is shown in the screenshot for the following six products.

1. Ace Supply Demand Zone indicator
2. Advanced Price Pattern Scanner
3. Elliott Wave Trend
4. Price Breakout Pattern Scanner
5. Harmonic Pattern Scenario Planner
6. X3 Chart Pattern Scanner (=Profitable Pattern Scanner)

This discounted price is only available when you buy these products from mql5.com
The price will go back to the original price when the discounts ends. Please take the discounted price now while it last only.
https://www.mql5.com/en/users/financ...eller#products
https://www.algotrading-investment.com/
Here are some simple tips for you to stay safe from this Covid19 Crysis.

1. Don’t touch your face – Avoid touching your eyes, nose and mouth.
2. Don’t cough or sneeze into your hands – Cover your mouth and nose with your elbow or tissue when coughing or sneezing. Dispose of used tissue immediately.
3. Keep your distance – Maintain a distance of at least 2 meter from people who are coughing or sneezing.
4. Wash, wash, wash your hands
5. Finally, care the loved one.

Most advanced Elliott Wave Software for your Trading

Elliott Wave Trend is the most advanced Elliott Wave Trading software, which helps you to trade with various Elliott Wave patterns like Wave .12345 pattern and Wave .ABC and Wave .ABCDE, and so on. Elliott Wave Trend was built on the concept of Precision Trading with Elliott Wave Structure Score. Our Elliott Wave Trend is professional tool for professional trader. Elliott Wave Trend is available in both MetaTrader 4 and MetaTrader 5 platform.
In the following article, we explain some basics operation with Elliott Wave Trend in MetaTrader.
https://algotrading-investment.com/2...g-performance/
At the same time, you can watch YouTube video titled as “Elliott Wave Trend Intro to find out more about Elliott Wave Trend Indicator.
YouTube Link:
Our Elliott Wave Trend is available in both MetaTrader 4 and MetaTrader 5 version. Here are the links to Elliott Wave Trend.
https://algotrading-investment.com/p...tt-wave-trend/
https://www.mql5.com/en/market/product/16472
https://www.mql5.com/en/market/product/16479