What are the 4 Bar Patterns
What are the 4 Bar Patterns?
If you remember we usually talk about the probabilities of the four bar patterns. Imagine the four bar patterns that you can form if you take out the open and close. Remember that most of it goes through rigorous testing before we start the scale and reproduce them on different accounts and currency passing instruments. If you look at the OHLC bar it usually has got a close and it has got a open, the same thing as a candle stick right? Just as the candlestick is usually colored in and depending on the color you know where the close is going to be. Now knowing that usually the question we ask if you remove close and if you remove open then two bars are going to look like vertical bars.
How many patterns can you form out of this taking out opens and closes and ignoring equal highs and equal lows? So if you ignore all of that how many bar patterns can you actually form?
The answer is actually 4. The bar patterns you can form is 4 because you can form high highs and low lows, inside a bar and finally outside the bar. So these are the only 4 patterns that the market can always form, so based on this we can form, see and place our H to out favor.
The first two that you are looking here are 40% each, that will make up a total of 80%. The rest of the ones will make up 10% and 10%, meaning 20%, so 10% each. Now understanding that you can actually put a system together which we actually talked about in the Live Trading Week where we traded live in front of people, with real cash and real money in real time for three full days. Based on that we can actually formulate strategies and place your probabilities in your favor and this is what we are doing over here comparing the daily to the one hour and as you can see and all the positions that we have in relation to the high or the low.
Stay disciplined, follow your trading plan and keep trading like a Master.