Crown Pattern

"Crown" patterns are a variation of skewed "Head and Shoulders" patterns, and they incorporate Fibonacci ratios in its formation. "Crown" patterns form at the end of market rallies or market declines suggesting a major trend change. As the name suggests, "Crown" patterns look like a series of "spikes" formed with Fibonacci ratios compared to prior swings.

"Crown" patterns form in all markets and in all time-frames. They are moderately reliable, but need confirmation to trade. Occasionally, "Crown" patterns form multiple spikes like "ZigZag" in a short span of time before the pattern really emerges out of the channel.

Trade: "Crown" patterns have similar trading opportunities as "Head and Shoulders" patterns with few Fibonacci based rules. In bearish "Crown" patterns, trade setup is made below the low of the recent "swing low" and a "stop" placement is set above the recent "swing high." In bullish "Crown" patterns, trade setup is made above the high of the recent "swing high."

Stop: For short trades, if the market rally takes above the high of the pattern, the "Crown" will fail. Place an order 2 ticks above the "swing high" of the pattern. For long trades, reverse the previous criteria.

Target:

The "Crown" patterns are profitable and can be trailed with a 2-bar high for "short" trades and a 2-bar low for "long" trades. Set profit targets at major "swing lows" and major "swing highs."

Crown Pattern

Crown Pattern

AB=O.5XA BC=i.6i8AB DE=o.6t8CD DE=EF

Crown (Bullish)

Crown (Bullish)

BC=i.27AB

CD=1,27BC DE=o,6l8CD

BC=i.27AB

CD=1,27BC DE=o,6l8CD

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