Subtitle: Fibonacci Analysis, Harmonic Pattern, Elliott Wave, and X3 Chart Pattern

Author: Young Ho Seo

Financial Trader, Engineer, and Quantitative Developer

1st Edition Publication Date: 25 July 2019

2nd Edition Publication Date: 9 October 2020

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About This Book

This is an introductory book for the chart patterns, which can predict the turning point in the financial market. This book provides the introductory guide for Forex and Stock market trading with these price patterns. The patterns covered in this book include Fibonacci Price Patterns, Harmonic Patterns, Elliott Wave, and X3 Chart Patterns. We provide one unified scientific framework over these chart patterns with some practical examples. This book also provides the detailed description on both geometric and numerical support and resistance in the special chapter. At the end of the book, we provide you the several practical tutorials to help your understanding with these chart patterns. Each chapter provides the self-testing questions to ensure your understanding except few chapters. If you want to read my other two books including “Guide to Precision Harmonic Pattern Trading” and “Scientific Guide to Price Action and Pattern Trading”, I recommend to read this book first because this is an introductory book.

Important note before reading this book

In the book, we provide several practical tutorials as below:

1. Tutorial with Peak Trough Analysis
2. Tutorial with X3 Price Pattern in Excel Spreadsheet
3. Tutorial for Chart Patterns

These tutorials can be a great help in understanding the book. If you need, then you might go for these tutorials first before reading this book. Especially, we provide the free application for Tutorial for Chart Patterns. Direct Download for this application is available from the link below:

www.algotrading-investment.com/FreeDownload/ChartPatternsTutorial.zip

Self-training questions in each chapter have time limit to answer. When you read this book for the first time, prepare stopwatch and strictly follow the time guideline. Please do not check answer at the back before you attempt to answer all the questions in the book. In addition, 80% is considered as pass for each chapter. When you attempt to calculate, you can use either Excel or calculator. You might need pencils and papers to draw some patterns in the questions too.

Download Peak Trough Analysis Tool

In the book, we provide some exercise on manual pattern detection. For manual detection of patterns, you need to use Peak Trough Analysis tool. We provide Peak Trough Analysis Tool for free of charge for this book. Here is the download link for the free version of Peak Trough Analysis. Please download Peak Trough Analysis before reading this book. In addition, we provide the practical MetaTrader tutorial with Peak Trough Analysis at the end of this book.

1)  MetaTrader 4 Version of Peak Trough Analysis

www.mql5.com/en/market/product/23797

2)  MetaTrader 5 Version of Peak Trough Analysis

www.mql5.com/en/market/product/22420

3)  Peak Trough Analysis from Algotrading-Investment.com

www.algotrading-investment.com/portfolio-item/peak-trough-analysis-tool

In addition, Optimum Chart provides its own Peak Trough Analysis tool. Hence, you do not need to download Peak Trough Analysis if you are the Optimum Chart User. We also provide the Excel and VBA version of Peak Trough Analysis for free. Please check the Chapter: Algorithm and Prediction for Artificial Intelligence, Time Series Forecasting, and Technical Analysis for the download link for this free tool. Even non-MetaTrader users can practice Peak Trough Analysis.

Table of Contents

1. Turning Point and Trend 8
2. Patterns are Good Predictor of Turning Point 18
3. Profitable Patterns in the Financial Market 38
4. Insignificant, Minor and Major Turning Points 50
5. Defining Profitable Patterns 59
6. Fibonacci Price Patterns 84
6.1 Introduction to Fibonacci Price Pattern 84
6.2 Structure of Fibonacci Price Patterns 90
6.3 Detecting Fibonacci Price Patterns 93
6.4 Trading with Fibonacci Price Patterns 104
7. Harmonic Patterns 111
7.1 Introduction to Harmonic Pattern 111
7.2 Structure of Harmonic Patterns 112
7.3 Detecting Harmonic Patterns 118
7.4 Trading with Harmonic Patterns 129
8. Elliott Wave Patterns 137
8.1 Introduction to the Wave Principle 137
8.2 Elliott Wave Perspective of Triangle and Wedge Pattern 143
8.3 Structure of Elliott Wave Patterns 147
8.4 Detecting Elliott Wave Patterns 152
8.5 Trading with Elliott Wave Patterns 159
9. X3 Price Patterns 165
9.1 Introduction to the X3 Price Patterns 165
9.2 Structure of X3 Price Patterns 169
9.3 Detecting X3 Price Patterns 174
9.4 Trading with X3 Price Patterns 185
10. Trading with Profitable Patterns 190
11. Risk Management with Profitable Patterns 208
11.1 Position Sizing Techniques 208
11.2 Reward/Risk Ratio in your trading 212
11.3 Breakeven Success (or win) Rate 214
11.4 Know Your Profit Goal Before Your Trading 216
11.5 Compounding Profits 219
12. Support and Resistance 226
12.1 Support and Resistance derived from Fractal Wave 229
12.2 Support and Resistance with Non-Fractal Wave Origin 238
12.3 Increase Success rate of Profitable Patterns with Support and Resistance 242
13. Tutorial with Peak Trough Analysis 245
13.1 Loading Peak Trough Analysis indicator to Your Chart 248
13.2 Working with Fibonacci Retracement in Your Chart 252
13.3 Working with Fibonacci Expansion in Your Chart 258
14. Tutorial with X3 Price Pattern in Excel Spreadsheet 264
14.1 Calculating the Fibonacci Retracement Ratio in Microsoft 267
14.2 Calculating the Fibonacci Expansion Ratio in Apple 272
14.3 Detecting AB=CD pattern in Facebook 277
15. Tutorial for Chart Patterns 284
16. Algorithm and Prediction for Artificial Intelligence, Time Series Forecasting, and Technical Analysis 305
17. References 339
18. Answers to Self-Training Questions 350