# Overview on Practical Trading with the Fifth Regularity

As we have shown in the Price Pattern Table in Figure 3-3 and Figure 3-4 in the 1st training course, we have identified the five regularities in the financial market. We can make use of these five regularities to predict financial market for our trading. It is wise to assume that no single trading strategy can work for all the price patterns or for the five regularities listed in Figure 3-3 and Figure 3-4. In fact, a trading strategy is designed to deal with one or few price patterns in Figure 3-3 and Figure 3-4. For this reason, we have to make the choice over the trading strategy we are going to use. It is important to use the right trading strategy to deal with the specific price patterns in our chart. The focus of this book is to present the practical trading strategies to deal with equilibrium fractal waves and other EFW derived patterns in the price series. The five characteristics of equilibrium fractal wave include:

• Repeatability
• Extension (transformation)
• Jaggedness (superimposed)
• Infinite scales ( or infinite cycle periods)
• Loose self-similarity (heterogeneity)

These five characteristics can be used to guide your trading with equilibrium fractal wave or other EFW derived patterns. Trading with equilibrium fractal wave or the EFW derived patterns require both discipline and experience. If you try to practice your trading without understanding these five characteristics, then it will take long time to master those techniques. Therefore, we do recommend going back to the first training if you are still not clear about these five characteristics.

Since varying scales of the patterns represents the infinite number of cycle periods, the smoothing algorithm based techniques can fail to extract useful insight from these price patterns. In fact, the pattern recognition for the practical trading is a challenging task for traders. In the 1st training course, we have emphasized that the Peak Trough Analysis can be a great help for our pattern recognition task. We have also outlined the three important benefits of using the Peak Trough analysis for our practical pattern recognition. The three important benefits include:

• Pattern recognition by identifying the boundary of the patterns.
• Ratio analysis for the scale free pattern recognition.
• Potential Scenario reduction in pattern recognition.

Furthermore, we have shown how to use “Equilibrium Fractal Wave index” to confirm the presence of particular shape of equilibrium fractal waves in the financial price series. The EFW index can be used:

• To know that any EFW based trading strategies, like harmonic pattern and Elliott wave theory, are suitable for the financial market of your interest.
• To select the financial market which your trading strategy can perform the best.

Below is the landing page for Price Breakout Pattern Scanner, Advanced Price Pattern Scanner, Elliott Wave Trend, EFW Analytics and Harmonic Pattern Plus. All these products are also available from www.mql5.com too.