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ABC ABC Patterns Patterns ResearchResearchSuri Duddellawww suriNotes comMarket Technicians Association Jan 18 2012

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Trade Chart Patterns Like The Pros

Market Technicians Association, Jan. 18, 2012

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Trade Chart Patterns Like The Pros

Agenda…• Introduction

– Why Pattern Trading?y g– Patterns Research/Trading

• ABC Patterns– Construction, Trading Rules – Perfect ABCs– Embedded Patterns

• Market Context• Examples

Trade Chart Patterns Like The Pros

IntroductionIntroduction• Education

8 C A i E i• 8+ years Corporate America Experience• 15+ Years Full-time Trading Experience• Quant/Math/Analytical/Programming Skills• 30+ Articles Presentations Book30+ Articles, Presentations, Book…• Pattern Trading - TradeStation

T d St k O ti d F t• Trade: Stocks, Options and Futures

Trade Chart Patterns Like The Pros

My Trading…• 6-8 Pattern Setups, Embedded & Failed Patterns• Specific Entries, Stops and Targets• Trade with the Market Context• Trade with the Market Context

– Pivots/Market Structures, Fib. Grid– Market Internals.. (CMI Indicator)

$ADV $DECL XLF $ESINX SPY $TRIN $TICK• $ADV, $DECL, XLF, $ESINX, SPY, $TRIN, $TICK

• Trading– Stocks/Options (Swing Trading)

• U.S. Markets, ADRs: China/India– Emini Futures (Intraday).. ES, YM, NQ, Oil, Gold

• Analysis/Trades/Setups are documented/posted on i b i b h i EOD d l isurinotes.com website both in EOD and real-time

Trade Chart Patterns Like The Proswww.suriNotes.com

WHY PATTERN TRADING?WHY PATTERN TRADING?

Trade Chart Patterns Like The Pros

Why Pattern Trading?• Pros:

– Chart Patterns are repeatable and predictive– Objective methods and has advantage over other

forms of Technical Trading – Provides clear Entries Stops and Targets to showProvides clear Entries, Stops and Targets to show

risk and reward ahead of a trade– Provides multiple opportunities into trades– Clues from Embedded patterns

• Cons: – Difficult to Identify or Code, Perfection may need

longer time experience

Trade Chart Patterns Like The Pros

My Favorite PatternsMy Favorite Patterns

• Harmonic Patterns• Harmonic Patterns – ABC, Symmetry, X5 – Gartley, Butterfly

D bl /M lti l B tt /T• Double/Multiple Bottoms/Tops• Head and Shoulders/Inv. H&S

B k• Breakouts – Channels, Triangles, Pennants, Flags

• Broadening/Wolfe Wave/3-Drives Patterns

Trade Chart Patterns Like The Pros

ABC PatternsPatterns

Trade Chart Patterns Like The Pros

ABC PatternsABC Patterns• H.M. Gartley’s Book… AH.M. Gartley s Book…

– Profits in the Stock Market

• 3-Pivot, 1-2-3 Waves…C

• Trend, Retracement, Trend• AB & CD (Continuation)

B

D

• AB = CD Pattern formation (Reversal)• Trade in the Direction of the Trend

Trade Chart Patterns Like The Pros

ABC Pattern (Bullish)ABC Pattern (Bullish)

Trade Chart Patterns Like The Pros

ABC Pattern (Bearish)ABC Pattern (Bearish)

Trade Chart Patterns Like The Pros

ABC – A Universal PatternABC A Universal Pattern• Charts always in ABC Pattern• Beginning of Elliott Wave (0 1 2) (2 3 4)• Beginning of Elliott Wave (0-1-2) (2-3-4)• Double Tops/Bottoms

H d d Sh ld• Head and Shoulders• Channels, Flags, Pennants

G l (ALL X )• Gartley (ALL X5 patterns)• Dragons• 3-Drives• Wolfe-Waves and Broadening Patterns

Trade Chart Patterns Like The Pros

Embedded PatternsEmbedded Patterns

Trade Chart Patterns Like The Pros

ABC Discovery (10+ years)ABC Discovery (10+ years)• My journey to discover ABC Patterns,

– ZigZag method.. Serious flaws– SwingPivots Optimization .. Complex,

Delayed– Third is Retracement Method… Random

• All above methods have advantages and disadvantages…

• But the real-answer is in basic Mathematics + other few methods

Trade Chart Patterns Like The Pros

Pattern ComponentsPattern Components• Orientation • Size• Location• Clarity • Uniformity• Uniformity• Trend Strength and Quality

– Before the Pattern formed (0-100 scale)– Within the Pattern (0-100 scale)– After the trade entry (0-100 scale)

• Embedded?• Symmetry?• Pattern Failure Points

Trade Chart Patterns Like The Pros

Pattern Trade ComponentsPattern Trade Components

• Entry Logic & Triggers• Entry Logic & Triggers• Exits: Stops (Measured, Trailing,

C t t hi )Catastrophic)• Exits: Targets

– Measured Moves– 1 to 3 (Intraday) and Time Based – 1 to 2 EOD and Time Projections

Trade Chart Patterns Like The Pros

Auto ABC (TradeStation)Auto ABC (TradeStation)• Auto ABC Pattern detection without any delays• Any Time-Frame/Chart (Intraday, EOD) • Provides Entry, STOP and Targets dynamically y g y y

without any delays• Time Projections • Scans in RadarScreen for Potential ABC Pattern

setups with Trade Info• Fully customizable

Trade Chart Patterns Like The Pros

Auto ABCAuto ABC

Trade Chart Patterns Like The Pros

ABC Scans in RadarScreenId tifiIdentifies

Retracement C%, ,#Bars

Entry Stop TargetsEntry, Stop, TargetsPerfect ABC

Trade Chart Patterns Like The Pros

ABC TYPES

Trade Chart Patterns Like The Pros

ABC RadarScreen Scans

Trade Chart Patterns Like The Pros

ABCs in OptionsABCs in Options

Trade Chart Patterns Like The Pros

ABCs in Optionsp

Trade Chart Patterns Like The Pros

ABCs in RangeBarsABCs in RangeBars

Trade Chart Patterns Like The Pros

ABC Videos onABC Videos on

YouTube

ID: surinotes

Trade Chart Patterns Like The Pros

Market Context

Trade Chart Patterns Like The Pros

Market ContextMarket ContextHow ABCs formed relation to the Key levels, Fib. Bands

Intraday: Key price Levels: Floor, Globex and OR Pivots Fib B d K t d i t l l Fib. Bands, Key support and resistance levels ABCs originating or terminating in Fib. Zones

For Daily or Weekly Charts:

Location of the pattern Location of the pattern Weekly, Monthly and Yearly Pivots Price reaction to the Fib. Bands and MAs

Trade Chart Patterns Like The Pros

Fib. GridFib. Grid

• Shows Pattern Support/Res StructuresShows Pattern Support/Res. Structures • Tools

Fib i B d– Fibonacci Bands– Pivot Structures (Floor, Globex, Fib. Zone)

S– Market Structures – Key Moving Averages

• 21 EMA, 89 EMA, 200 SMA

Trade Chart Patterns Like The Pros

ABC Bullish with Fib. Bands

Trade Chart Patterns Like The Pros

Fib. Grid with ABCsFib. Grid with ABCs

Trade Chart Patterns Like The Pros

CMI (Combined Market Internals)CMI (Combined Market Internals)

• Finds the Underlying Market Directiony g• Uses ADV, DECL, TICK, TRIN, XLF,

SPY, ESINX• Intraday Indicator• Plots a Histogram on 5m Chart• CMIRibbon plots 4 key components on• CMIRibbon plots 4 key components on

1m Chart (used for Trade Triggers)• Trade with the 5m CMI directionTrade with the 5m CMI direction• Also used for Divergence

Trade Chart Patterns Like The Pros

Combined Market Internals (CMI)Combined Market Internals (CMI)

Trade Chart Patterns Like The Pros

CMI (5m)CMI (5m)

Trade Chart Patterns Like The Pros

Perfect ABC Trade SetupPerfect ABC Trade Setup

Trade Chart Patterns Like The Pros

Perfect ABC in S&P 500Perfect ABC in S&P 500

Trade Chart Patterns Like The Pros

Perfect ABC in SP500

Trade Chart Patterns Like The Pros

ABC Bullish (TEVA)ABC Bullish (TEVA)

Trade Chart Patterns Like The Pros

ABC Bullish (TEVA)ABC Bullish (TEVA)

Trade Chart Patterns Like The Pros

ABC Bearish & H&S (INFY)ABC Bearish & H&S (INFY)

Trade Chart Patterns Like The Pros

ABC Bearish & H&SABC Bearish & H&S

Trade Chart Patterns Like The Pros

ABC Bearish & H&S (INFY)ABC Bearish & H&S (INFY)

Trade Chart Patterns Like The Pros

ABC Bullish (@ES Intraday)ABC Bullish (@ES Intraday)

Trade Chart Patterns Like The Pros

ABC Bullish (@ES Intraday)ABC Bullish (@ES Intraday)

Trade Chart Patterns Like The Pros

ABC Bullish (@ES Intraday)ABC Bullish (@ES Intraday)

Trade Chart Patterns Like The Pros

Trade Chart Patterns Like The Pros

Trade Chart Patterns Like The Pros

Embedded Patterns

Trade Chart Patterns Like The Pros

ABC within Elliott Wave

Trade Chart Patterns Like The Pros

EW Trade Example

Trade Chart Patterns Like The Pros

Symm. Triangle and ABCSymm. Triangle and ABC

Trade Chart Patterns Like The Pros

Xerox ABCXerox ABC

Trade Chart Patterns Like The Pros

Xerox ButterflyXerox Butterfly

Trade Chart Patterns Like The Pros

Xerox ButterflyXerox Butterfly

Trade Chart Patterns Like The Pros

Xerox ButterflyXerox Butterfly

Trade Chart Patterns Like The Pros

Inv. H&S and ABC PatternsInv. H&S and ABC Patterns

Trade Chart Patterns Like The Pros

Book (English & German)

Trade Chart Patterns Like The Pros

Book300 Pages8.5” x 11” Book

65 Patterns225+ Chart Illustrations225+ Chart IllustrationsPrecise Entries/ExitsSpecific Targets/Stops

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Trade Chart Patterns Like The Pros

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Trade Chart Patterns Like The Pros