Tag Archives: 2618

BAMM The Bat Harmonic Trading Pattern!

BAMM The Bat Harmonic Trading Pattern!

Bat Pattern is one of the most Risk/Reward Ratio favorable harmonic patterns in the directory of harmonic patterns. It completes at 88.6 fibonacci confluence with 161.8 or 261.8.

Bat Harmonic Pattern
Bat Harmonic Pattern

Harmonic Trading
In his book Harmonic Trading Volume 2, Scott Carney described another phenomenon that occurs during the formation of a BAT Pattern. It is called BAMM.

BAMM stands for Bat Action Magnet Move. According to Scott Carney when CD leg of a Bat Pattern forms and it exceeds point B of the potential Bat Pattern, the price action starts to experience a Magnetic Attraction towards 88.6 Fibonacci level where the Bat Pattern is expected to complete. The price action tends to get pulled towards D point.

BAMM The Bat Harmonic Trading Pattern Trigger
BAMM The Bat Harmonic Trading Pattern Trigger

This behaviour is not 100% consistent but is very common and can be used to make more profits.

Usually once the CD leg exceeds point B, the price action comes back to retest the zone between point B and point C before resuming direction towards point D at 88.6. Similar to 2618 Trade Entry Technique we can follow 2618 Trade Entry Technique rules to enter the market in this zone with a target completion at 88.6 i.e. point D. Stops will have to be either beyond point C or based on Supply/Demand zones in CD leg.

BAMM The Bat Harmonic Trading Pattern
BAMM The Bat Harmonic Trading Pattern

At point D we can take profits on this trade and enter a new trade at the completion of the Bat Pattern.

Leave me a comment. I would like to hear your opinions and suggestions.

Have a great trading time!

-TradeYodha

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Leave a comment: I would love to hear your thoughts, suggestions on this topic. Please leave a comment.
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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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What Is 2618 Trade Entry Technique?

What Is 2618 Trade Entry Technique?

2618 Trade Entry Technique is probably the safest way to trade a double top or double bottom and although the Risk/Reward ratio is a little less favorable.

The basic concept behind this technique is that after a double top or double bottom formation, the market usually comes back to retest the structure before it finally resumes the originally diverted trend.

In double top formation the trend is downwards and in double bottom formation the trend is upwards. After the retest the market starts following these trends again.

2618 Trade Entry Technique
2618 Trade Entry Technique

This retest gives us a very good opportunity to get involved in the market. 2618 Trade Entry Technique is the best confirmation you can get in double tops and double bottoms.

The PRZ runs from 61.8 fibonacci retracement to highest high of the recent double top formation. In case of double bottom it is between 61.8 retracement and lowest low of double bottom formation. Hence the stops must be above double top highest high and below double bottom formation.

Few points to remember:

  1. This method has few disadvantages:
    1. The price may never come back to retest the PRZ
    2. Reward may be lower and risk higher because of confirmation in wide PRZ. So if possible we should wait for candle stick formations inside the zone to take a late entry.
  2. V formation and break:
    1. Double top and double bottom formation is only valid if a V (double top) or inverted V (double bottom) formation has been formed.
    2. We must use 2618 Trade Entry Technique only when the market has broken this V formation and has come back to retest the PRZ.

Have a great trading time

-TradeYodha

 

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Leave a comment: I would love to hear your thoughts, suggestions on this topic. Please leave a comment.
---------------------------------------------------------------------------------
Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
---------------------------------------------------------------------------------