Learn Trading [Part 7] : Cypher Pattern - Mystery Solved
No matter in what market you trade, there is always going to be patterns. Learning pattern can greatly help you to excel your trading accuracy and minifying Risk to Reward ratio. Cypher pattern is one of the advanced pattern in trading. There are some strict rules that need to be followed to get the pattern right. If the pattern do not follow even a single rule then that pattern will become invalid. Before learning advanced patterns you need to have a good understanding of Fibonacci Retracement tool and its usage.
The first rule is that there should be a retracement of its value in between 0.5 and 0.618(Wick of a candle may go below 0.618 but it must not close below 0.618), if it is beyond this retracement or shorter than this retracement then it would not form a cypher pattern but may form other patterns like batt pattern, Gartley pattern etc.
Now we are at point X and for the cypher pattern, the market should move upwards with a retracement in between 1.272 and 1.414. Let it be point C.
In order to complete the Cypher pattern, the market should move down from point C to point D and the point D should be lower that the point X and above 0.7 retracement. If point D is above point X then the Cypher pattern will be Invalid.
If we look at the real market then it would seem pretty difficult to find patterns but you will get better as you practice more. Now let’s look at the cypher pattern with a market example.
Keep Practicing patterns and Keep sharpening your eyes. STAY TUNED For more awesome Trading Patterns.
Great post buddy. Learning new things here
Thanks! Likewise :)
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