Beginners' club - Candlestick analysis

[sanjivdhir]

Hi....Iam posting a chart of gold guinea ..on Friday it made a hammer on daily chart...but it has also broken the earlier swing low....so what conclusion can be drawn from it....will someone please help me out.....

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[adityasaraf007]

Hi Paul, Aditya,

Just did a quick read on the 1-2-3. Couple of queries:

1/ Is the Jan 9; Jan 23 and its break ard 6 feb an ideal 1-2-3?
This looks good.... However, Point 1 as 15th Jan looks much better to me....

2/ When is it appropriate to act on a 1-2-3 formation - on the break of swing high forming the 2? (with SL at the swing low at 3 i presume) OR immedly after the formation of 3?
Correct.... after point 2... This is what Paul Sir preaches...

3/ Are there possibilities of consecutive 1-2-3s forming?
Yes.... Just have a look at this post of mine in Paul Sir's thread...

Thanks.

Replies are within quote.... BTW, what's your guesstimate about my age....

 

[iyerboi]

Replies are within quote.... BTW, what's your guesstimate about my age....

23-28 would be my estimate. me correct?

 

[adityasaraf007]

23-28 would be my estimate. me correct?

Nope...

 

[iyerboi]

Nope...

uh oh.....long shot eh?

 

[TraderRavi]

uh oh.....long shot eh?

20 - 25.............

 

[iyerboi]

20 - 25.............

his age shd b 20-23 now

 

[adityasaraf007]

20 - 25.............

his age shd b 20-23 now

Afterall... It's Beginner's Club....

Lower end of the range is the right answer.... Iyer Sahab remember "Junior friend"....

 

[iyerboi]

Afterall... It's Beginner's Club....

Lower end of the range is the right answer.... Iyer Sahab remember "Junior friend"....

Lol....Arey yaar....main khud 24 ka hoon isliye maat kha gaya

 

[4xpipcounter]

Hi Paul, Aditya,

Just did a quick read on the 1-2-3. Couple of queries:

1/ Is the Jan 9; Jan 23 and its break ard 6 feb an ideal 1-2-3?
Yes, but a 1-2-3 was also formed from the 9th to the 16th. The break form the formation you mentioned actually happened on the 2nd of Feb.
The break on the formation I mentioned happened on the 17th

2/ When is it appropriate to act on a 1-2-3 formation - on the break of swing high forming the 2? (with SL at the swing low at 3 i presume) OR immedly after the formation of 3?
You cannot act after the formation of the 3, because during live price action, you don't know for a fact that is going to be the 3. After all, how would you be certain it was not going to dip lower? So, yes, about 2 points on the other side of the 2 is your entry.

3/ Are there possibilities of consecutive 1-2-3s forming?
We may have already answered that. Our 1-2-3's overlapped.
The best way to answer that question, though, is through observation. When you see the consecutive 1-2-3's happen for yourself, and then the subsequent price action, it makes you believe in it. This is what you want in a trading plan. When you see something happen over and over again through personal observation, no one can talk you out of it.
I get asked a lot about my personal confidence. That is no credit to me as being so smart, nor is it a cocky attitude, nor is it just some positive mental attitude mind trip. It is simply that what I convey is because of my personal observation. Considering I have seen the same pattern happen so many times, no one on the face of Earth can talk me out of it.

Thanks.

You asked about the ideal 1-2-3. They happen very infrequently, but when they do (Bookmark this sentence.), drop everything you are doing and make sure you get in. The pips/ points are going to be monstrous:

1. It is formed at the end of a trend. In other words a bullish 1-2-3 at the end of a downtrend or vice versa.
2. It has perfect symmetry, which is approximately the same amount of candles from 1>2 as 2>3.
3. It forms a gartley-- 2>3 is 78.6% the distance as 1>2

Anything less than an ideal 1-2-3 will still work, as long as it is a 1-2-3.
Anytime you feel a market is nearing the end of a trend, then look for a 1-2-3 formation going the other way. You can even scope down on lower TF's to find a 1-2-3. As an example, it might a long trend on the daily. If you see a 1-2-3 on the hourly, then take it. That may have been your entry for a terrific trade heading in the opposite direction. Here's the nice thing! Even if you are wrong in estimating the reversal, you will still be a winner on a smaller trade.