Trading Patterns with Market Structures
Market Structures concept is simple, yet a very powerful structuring concept. Markets have structures
and traders miss most cues as they are constantly hunting some pattern, momentum, oscillator
or some Zen-type signals. Market Structure formation is a price phenomenon occurring at
major turns. Prices start with a wave (lets say Up) and it ends at some point and then there is
down-wave, and it ends some time and then up-wave. These wave formations start with the
Market Structures. Market Structure Low (MSL) and Market Structure High (MSH) formation
is continuous and is repetitive at every wave begin and every wave end.
Market Structures form in all markets, all time-frames and in all instruments. They fail and refail,
form and re-form. Market Structure is a concept pattern. It needs other indicators,
support/resistance levels, triggers to confirm the theory and its works.
JAZZ with ABC Bullish Pattern with Market Structure Low.
JAZZ was in a prolonged down trend late 2016, and in mid Feb. 2016, it traded outside the Fib. Bands and
formed a Market Structure low (MSL) at 108. This provided a clue for JAZZ may be forming a bottom. From mid Feb. to mid March JAZZ attempted a rally near mid Fib. Bands ($134), potential AB Leg of ABC Pattern. Next Leg (BC) retracement (50% time, 73% price) completed ABC pattern. Late March 2016, JAZZ triggered EL level at 121.53. The ABC Pattern success was strong as 'A' pivot is also an MSL. This added an additional confidence to trade ABC Pattern. After triggering Entry from 121.58 (EL), within few days JAZZ traded near $131 in the first target zone.
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