Hi All,

Very often 5-point patterns look not perfect, and hence my question: is there an accuracy/tolerance (e.g. in percentage) that if pattern falls within it we can still consider it in a trade?





The above pattern I attached just for an example. It is not completed and now it looks even worse. But just for this case, is it "good" enough to take it into trade consideration?

Regards,
ijon

Let me have another question. On the below image I'd like to draw fibo grouping for the potential ABCD pattern that seems to start from point 3. Let's presume that retracements from trend 2-3 don't make tight grouping. Is it reasonable to draw retracement from trend 1-2?

ijon,

I don't do any retracements from points 1 to 2 for an ABCD that starts from point 3. If I don't get 'harmonicity' i.e. tight groupings from the swings from point 2 to 3, that's a warning signal to me, and I stand aside. This is something I show in mentorships in detail. If an issue isn't behaving harmonically, I'm not interested. But from a technical standpoint I don't use anything from points 1 to 2, except to see if point 3 is at a grouping. I can't say there is no validity to doing retracements like this, only that I decided I didn't think it was useful for me, or technically valid for my work.

Thanks a lot Jim! It is very helpful info for me.