Devin Sage X-Sequentials : Successfull Forecasts and Trading Part 3 Locating X-Sequentials Patterns

on January 28 2010 8:33 PM

X-Sequentials patterns can be located easily in a chart when you shift your percpective from complexity to simpllicity.

We therefore simplify the process of X-Sequentials pattern recognition by putting the term reversals into use.

We seek our charts for reversals .

 

Those reversals necessary for X-Sequentials pattern recogition are described in this article with schemes and real examples.

What is a reversal ?

A reversal could be a candlestick pattern ,a head and shoulder pattern or any kind of price bar relation which indicates a change of the preceding trend/move.

 

How to put a reversal into use with X-Sequentials to locate the patterns and derive forecasts in price and time ?

Simply put ,we can´t .

We have to invent our definition of a reversal..

We reduce the complex variety of possible reversals (reversal patterns) to one single characteristics: The turn of the price actions momentum 

and :quantify this momentum reversals only with our X-Sequentials connective lines !

This will enable the technical analyst to locate and trade X-Sequentials Patterns and derive forecasts in price and time .

 

 

The following schemes and explanations are necessary for the appliciation of X-Sequentials .

You will learn how to locate a reversal and label a correct X-Sequnetials pattern.

We start with the X-Sequentials X5 pattern.

The schemes and their explanations are followed by real examaples.

 

X-Sequentials X5 Pattern Momentum Reversals

After constructing the 1X5-3X5 connective line we wait that prices break trough this 1X5-3X5 line.

That move is a potential 5X5 move segment.

Price action is driven through the 1X5-3X5 line untill the momentum ends and reverses.

If the reversed momentum drives prices back to the 1X5-3X5 connective line and breaks this line in counter direction ,a momentum reversal took place and defines our entry signal

Schemes :

1)

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Scheme 1 shows how the up move´s momentum drives price higher above the 1X7-5X7 connective line.

If the price action breaks above the 1X5-3X5 connective line (circle 1) and reverses below the 1X5-3X5 connective line (circle 2) ,point 5X5 is defined .

A reversal took place and defines our short entry signal for the Z move.

2)

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Scheme 2 shows how the down move´s momentum drives price lower below the 1X3-3X5 connective line.

If the price action breaks below the 1X5-3X5 connective line (circle 1) and reverses above the 1X5-3X5 connective line (circle 2) ,point 5X5 is defined .

A reversal took place and defines our long entry signal for the Z move.

We now proceed with the X-Sequentials X7 Pattern.

X-Sequentials X7 Pattern Momentum Reversals

After constructing the 1X7-5X7 connective line we wait that prices breaks trough this 1X7-5X7 line.

That move is a potential 7X7 move segment.

Price action is driven through the 1X7-5X7 line untill the momentum ends and reverses.

If the reversed momentum drives prices back to the 1X7-5X7 connective line and breaks this line in counter direction ,a momentum reversal took place and defines our entry signal

Schemes :

1)

width=361

Scheme 1 shows how the up move´s momentum drives price higher above the 1X7-5X7 connective line.If the price action breaks above the 1X7-5X7 connective line (circle 1) and reverses below the 1X7-5X7 connective line (circle 2) ,point 7X7 is defined .

A reversal took place and defines our short entry signal for the Z move.

2)

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Scheme 2 shows how the down move´s momentum drives price lower below the 1X7-5X7 connective line.

If the price action breaks below the 1X7-5X7 connective line (circle 1) and reverses above the 1X7-5X7 connective line (circle 2) ,point 7X7 is defined .

A reversal took place and defines our long entry signal for the Z move.

Examples of X-Sequentials X5 Patterns -Reversals

Chart 1:

width=598

Arrow 1) indicates the momentum of the up move

Arrow 2) indicates the momentum of the down move :The momentum has turned and implies our short entry signal for the down move Z (5XZ).

Chart 2 :

width=598

Arrow 1) indicates the momentum of the down move

Arrow 2) indicates the momentum of the up move :The momentum has turned and implies our long entry signal for the up move Z (5XZ).

Chart 3:

width=598

Arrow 1) indicates the momentum of the up move

Arrow 2) indicates the momentum of the down move :The momentum has turned and implies our short entry signal for the down move Z (5XZ).

Chart 4:

width=598

Arrow 1) indicates the momentum of the up move

Arrow 2) indicates the momentum of the down move :The momentum has turned and implies our short entry signal for the down move Z (5XZ).

Chart 5:

width=598

 

 
 

Arrow 1) indicates the momentum of the down move

Arrow 2) indicates the momentum of the up move :The momentum has turned and implies our long entry signal for the up move Z (5XZ).

Examples of X-Sequentials X7 Patterns -Reversals

Chart 1:

width=598

Arrow 1) indicates the momentum of the down move

Arrow 2) indicates the momentum of the up move :The momentum has turned and implies our long entry signal for the up move Z (7XZ).

Chart 2:

width=598

Arrow 1) indicates the momentum of the down move

Arrow 2) indicates the momentum of the up move :The momentum has turned and implies our long entry signal for the up move Z (7XZ).

Beforehand a failure signal took place.

Chart 3:

width=598

Arrow 1) indicates the momentum of the down move

Arrow 2) indicates the momentum of the up move :The momentum has turned and implies our long entry signal for the up move Z (7XZ)

Chart 4:

width=598

 

 
 

Arrow 1) indicates the momentum of the up move

Arrow 2) indicates the momentum of the down move :The momentum has turned and implies our short entry signal for the down move Z (7XZ)

The next article covers how to combine technical indicators with X-Sequentials.

yours sincerely,

Devin Sage ,TXA Trading

www.Technische-X-Analyse.de

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