The Cypher Pattern Trading Strategy will teach you how to correctly trade and draw the cypher pattern. More, you can use the cypher harmonic pattern on its own and have a profitable Forex trading strategy. The Cypher pattern forex is part of the Harmonic trading patterns and is the most exciting harmonic pattern as it has the highest winning rate.
Our team at Trading Strategy Guides is building up a step-by-step guide about Harmonic trading patterns and we recommend starting reading the introduction into the harmonic patterns here: The Cypher pattern forex works in every market and on any time frame, but we at Trading Strategy Guides recommend avoiding the lower time frames and only stick to the higher time frames, preferably the 4h and the daily chart.
In the harmonic pattern world, the Cypher pattern forex is a four leg reversal pattern that follows specific Fibonacci ratios. The Cypher pattern forex needs to satisfy the following Fibonacci rules: The first rule of the Cyper pattern Forex is the retracement from X up to A has to come down and touch the 0.
The next rule of the Cypher pattern forex is a Fibonacci extension of the XA leg that comes in 1. The final leg of the Cypher pattern where our orders will be executed, which is at the finishing point D. The point D is located at the 0. There is one more important thing that we need to learn before to actually define the Cypher pattern trading strategy rules, which is to give you indications on how to apply the Harmonic pattern indicator.
I would walk you through this process step by step. All you need to do is to follow this simple guide and see figure below for a better understanding of the process: From a risk management point of view, it may be the case that the Cypher pattern is the most exciting harmonic pattern as it has the highest winning rate.
Our backtesting results have proven over and over again that the cypher pattern forex is a very reliable harmonic pattern. Buy with a market order at the opening candle preceding the completion of the D point at 0.
Once the market touches the 0. We can note that the price only had a small deviation below the 0. The next important thing we need to establish is where to place our protective stop loss. For the Bullish Cypher pattern Forex, you normally want to place your protective stop loss below the point X.
The next logical thing we need to establish for the Cypher patterns trading strategy is the logical place for our take profit level. The Cypher patterns trading strategy is a reversal strategy and we want to make sure we capture as much as possible from the new trend. The Cypher pattern has a conservative take profit target.
We want to take profits once we reach the point A of the pattern. Use the same rules for a SELL trade. In the figure below you can see an actual SELL trade example. The rules of the Cypher pattern trading strategy are pretty much straight forward, however, even though it has a bigger winning ratio than the other harmonic patterns, the Harmonic Cypher structure can be spotted very rarely on the chart so we need to take full advantage of the instances it shows up.
We hope the Cypher patterns trading strategy rules have been clear and succinct. If you still have questions, please leave them in the comment section down below. Grab the Free PDF Strategy Report that includes other helpful information like more details, more chart images, and many other examples of this strategy in action! If you spot any current Cypher patterns on your chart and you want to share please do! We can give you some feedback on it to make sure it is following the rules of this Cypher pattern strategy.
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Tap Here for your Free Report http: Our goal is to help you find a strategy that fits you best. So if you find that this one is not for you then no worries, we have many of them! We have a Cypher Patterns Trading Strategy that we developed a while back and we think this one you are going to enjoy! Tap Here to Get the Free Report! Its a great strategy for day traders and occasional scaplers.
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Any questions let us know! What is the Cypher Pattern Forex? Step 1 How to draw cypher patterns I would walk you through this process step by step. First, click on the harmonic pattern indicator which can be located on the right-hand side toolbar of the TradingView platform.
In the MT4 terminal you can locate the harmonic pattern indicator in the Indicators library. Identify on the chart the starting point X, which can be any swing high or low point on the chart. Every swing leg must be validated and abide by the cypher pattern forex Fibonacci ratios presented above. See below… Step 2 Buy Entry: Buy once CD-swing leg reaches 0.
Place the Protective Stop Loss below wave X. Take profit once we reach the point A The Cypher patterns trading strategy is a reversal strategy and we want to make sure we capture as much as possible from the new trend. Why, do we take profit so early? Conclusion The rules of the Cypher pattern trading strategy are pretty much straight forward, however, even though it has a bigger winning ratio than the other harmonic patterns, the Harmonic Cypher structure can be spotted very rarely on the chart so we need to take full advantage of the instances it shows up.
Tap here now to get the E-Book Completely Free!!! Thank you for reading! We posted a new bat pattern strategy on our blog! Hello Traders and happy Friday! In Fact, here are the easy step-by-step rules we created for you: The EFC is now available to every trader on tradingview platform!
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