fibonacci patterns on the spx

[Paddington]

I thought I would post a few of these patterns here as taught by Larry Pesavento

Three basic patterns in that school
1. Gartley
2. Butterfly
3. 3 Drives

I thought I may post a few here as they occur (mainly intraday)

We currently have the potential for a butterfly top here. (please note they donot always work.

For me I look for them to reverse in the 1.272 to 1.618 range and have highlighted that in the attached. Typical targets I use are 0.382 and 0.618 retraces to the bottom of the pattern.

The pattern contains an abcd pattern. I've shown here (orange line) where cd=1.618ad at 955 (very close and a common W3:W1 relationship in EW. This is quite a large one so ideally for entries on those I look for confirmation or for smaller patterns.

P

 

[Paddington]

gartley

having started, here's in real time (almost) a gartley trade set up

For me I trade gartleys that trade between 0.618 and 0.786 retraces with a clear abcd where cd= ab for entry as a minimum and 1.618 as a maximum

Anyway as the Americans say my bad as I didn't take this set up as I'm not so keen on the bigger pattern. I should always though as it;s a nice trade often. Note I will often link in support and resist areas to this trade too.

hopefully clear on the chart, but for me

entry on 1:1 or 0.618 whichever is later
avoid trading if long range bars and momentum and wait for a higher entry
try to keep stop as close as possible as then you get a higher expectancy

for me
enter 0.618, stop a couple of ticks beyond the 0.786
exit one at 0.382 or obvious support cluster
exit 2 at 0.618

the attached trade was enter 945.25, target 1 943.25 hit +2, stop moved to pattern complete, stopped - 0.25,overall +1.75 off risk 2.5*2 so 35%, if it had failed then -100% of course and if target 2 had also been hit it would have been 150% in this case

Whilst the 2nd exit has a far better return using a 1st exit helps the drawdowns alot to make psychologically easier

P