Can anyone explain this pattern to me?

I've been reading this pattern here - http://www.investopedia.com/articles.../04/031004.asp

I just can't seem to understand it well enough. Could someone explain it for me please?

Here is a screen - http://i.investopedia.com/inv/articl...s/031004_1.gif

It seems to me that five bars as a group, so we need two group that's 10 bars totally.
U should take the group1 as a BIG BAR 1, and take the group 2 as a BIG BAR 2.

in other word:
group1 contains bar1 ~ bar5
group2 contains bar6 ~ bar10,
group1 has its highest price, we name it high_group1, lowest price name low_group1;
group2 has its highest price, we name it high_group2, lowest price name low_group2;

if high_group1 < high_group2 && low_group1 > low_group2, then group2 engulf group1 (or BIG BAR 2 engulf BIG BAR 1).

Hello ReyesWhite,

I will try to explain the concept for you as best as I can, though pipsliencer explained it quite well but did not finish in my humble opinion.

The pattern is similar to bearish / bullish engulfing pattern (hope you know this pattern, if not try to google it).

In addition to above example: if pattern is in downtrend--> you BUY, if pattern is in uptrend you SELL.

Let me know if you need more explanations on the subject if I wasn't very specific and I will be glad to help.

Have a good one!

Don't over complicate it...this just doesn't have to be that hard...

Each of those signals has various interpretations...stick with the basics. The short was a simple trend line break that failed on retest...short the failure.

The long is a well defined support level that held and gave a morning star signal, (first opportunity)..but if you didn't like that you could take it when the trend line broke (confirmation?) I really don't like that word but many call it that...

Just recognize the opportunities when they arrive...

Sushi roll?? REALLY???

hi, I cannot comment on your actual post but when you find several inside bars together with or without outside bars, this is indecision and the more ibs the better for when it goes it goes,,MEANING lots of pips. I add, used on a decent time chart

They are basically "Expanding triangles" (ET's) (megaphone shaped) ET tops are always "Higher high major trend reversals" ET bottoms are always "Lower low major trend reversals" .

Only several traders in the world knows to correctly interpret this indicator....and they say it is Holy Grail ...So find those traders to tell you secret of indicator.

A technical indicator cannot possibly be the holy grail. Nowhere near.

I am interested to know WHY you believe an indicator can be considered the holy grail.

That is also secret.

Ok, you can hold that belief about indicators.

The closest thing to a holy grail is understanding the market sentiment, sensitivity, and expectations, at any given point in time. Indicators/chart patterns do not provide you with those critical information and thus can never be considered the 'holy grail'. Unless all the big banks and hedge funds in the world focus on the exact indicator and execute/adjust their orders solely based on that indicator, then you will have little luck.

Of course, that depends on your definition of a 'holy grail' though.

Good luck.

The thing i don't understand about this is how do you pick out the first five bars? what is the criteria? five bull bars? any five bars? etc;

This is how i gather the pattern works. I have just taken a trade on a trendline break using this pattern.



In the first rectange - 5 bars in a narrower range than the 2nd rectange with 5 bars breaking the range of the prior rectangle.

Fwiw, generally when a trading range is broken on both sides (the first break being false) and then breaking out the opposite is a spot on market "tell".

The first or" false break" is a manipulation by the market, trapping breakout orders, getting a better fill and using their corresponding stop orders (usually on the backside of the range) to fuel the intended move.

IMHO your sushi roll is a variation of that mindset, to me this would be better as a reversal pattern to trade - the first 5 bars, current market range are superseded by the next. In doing so, the market appears to be continuing in trend only to reverse and take out the initial 5 bar range (which should have set a previous high/low * see below*), this should confirm increased market participation, other markets you would look for a marked surge in volume.

Any retrace back into the initial range would be a good entry with a stop beyond the false break.

* this setup is similar to several others, all with the same premise, I think an earlier poster mentioned how this would look on a higher time frame, engulfing bar, the difference I see with this pattern the initial 5 bars doesn't necessarily have to form any kind of fractal, you're just pinpointing a perceived lull in the action and the following increase in activity faking continuation and reversing.

Most retraces and all impulse waves have at least 2 waves or thrusts in price action, so you're trading the second wave in this setup, the market shows it's hand and you're looking to catch the first round of orders waiting to jump on.

Of course this patterns failure is called a "wash and rinse" you're stops are now the fuel for the original trends continuation

my $.02