ABC Suri Notes

ABC ABC Patterns Patterns ResearchResearchSuri Duddellawww suriNotes comMarket Technicians Association Jan 18 2012

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Trade Chart Patterns Like The Pros

Market Technicians Association, Jan. 18, 2012

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Agenda…• Introduction

– Why Pattern Trading?y g– Patterns Research/Trading

• ABC Patterns– Construction, Trading Rules – Perfect ABCs– Embedded Patterns

• Market Context• Examples


IntroductionIntroduction• Education

8 C A i E i• 8+ years Corporate America Experience• 15+ Years Full-time Trading Experience• Quant/Math/Analytical/Programming Skills• 30+ Articles Presentations Book30+ Articles, Presentations, Book…• Pattern Trading - TradeStation

T d St k O ti d F t• Trade: Stocks, Options and Futures


My Trading…• 6-8 Pattern Setups, Embedded & Failed Patterns• Specific Entries, Stops and Targets• Trade with the Market Context• Trade with the Market Context

– Pivots/Market Structures, Fib. Grid– Market Internals.. (CMI Indicator)

$ADV $DECL XLF $ESINX SPY $TRIN $TICK• $ADV, $DECL, XLF, $ESINX, SPY, $TRIN, $TICK

• Trading– Stocks/Options (Swing Trading)

• U.S. Markets, ADRs: China/India– Emini Futures (Intraday).. ES, YM, NQ, Oil, Gold

• Analysis/Trades/Setups are documented/posted on i b i b h i EOD d l isurinotes.com website both in EOD and real-time

Trade Chart Patterns Like The Proswww.suriNotes.com

WHY PATTERN TRADING?WHY PATTERN TRADING?


Why Pattern Trading?• Pros:

– Chart Patterns are repeatable and predictive– Objective methods and has advantage over other

forms of Technical Trading – Provides clear Entries Stops and Targets to showProvides clear Entries, Stops and Targets to show

risk and reward ahead of a trade– Provides multiple opportunities into trades– Clues from Embedded patterns

• Cons: – Difficult to Identify or Code, Perfection may need

longer time experience


My Favorite PatternsMy Favorite Patterns

• Harmonic Patterns• Harmonic Patterns – ABC, Symmetry, X5 – Gartley, Butterfly

D bl /M lti l B tt /T• Double/Multiple Bottoms/Tops• Head and Shoulders/Inv. H&S

B k• Breakouts – Channels, Triangles, Pennants, Flags

• Broadening/Wolfe Wave/3-Drives Patterns


ABC PatternsPatterns


ABC PatternsABC Patterns• H.M. Gartley’s Book… AH.M. Gartley s Book…

– Profits in the Stock Market

• 3-Pivot, 1-2-3 Waves…C

• Trend, Retracement, Trend• AB & CD (Continuation)

B

D

• AB = CD Pattern formation (Reversal)• Trade in the Direction of the Trend


ABC Pattern (Bullish)ABC Pattern (Bullish)


ABC Pattern (Bearish)ABC Pattern (Bearish)


ABC – A Universal PatternABC A Universal Pattern• Charts always in ABC Pattern• Beginning of Elliott Wave (0 1 2) (2 3 4)• Beginning of Elliott Wave (0-1-2) (2-3-4)• Double Tops/Bottoms

H d d Sh ld• Head and Shoulders• Channels, Flags, Pennants

G l (ALL X )• Gartley (ALL X5 patterns)• Dragons• 3-Drives• Wolfe-Waves and Broadening Patterns


Embedded PatternsEmbedded Patterns


ABC Discovery (10+ years)ABC Discovery (10+ years)• My journey to discover ABC Patterns,

– ZigZag method.. Serious flaws– SwingPivots Optimization .. Complex,

Delayed– Third is Retracement Method… Random

• All above methods have advantages and disadvantages…

• But the real-answer is in basic Mathematics + other few methods


Pattern ComponentsPattern Components• Orientation • Size• Location• Clarity • Uniformity• Uniformity• Trend Strength and Quality

– Before the Pattern formed (0-100 scale)– Within the Pattern (0-100 scale)– After the trade entry (0-100 scale)

• Embedded?• Symmetry?• Pattern Failure Points


Pattern Trade ComponentsPattern Trade Components

• Entry Logic & Triggers• Entry Logic & Triggers• Exits: Stops (Measured, Trailing,

C t t hi )Catastrophic)• Exits: Targets

– Measured Moves– 1 to 3 (Intraday) and Time Based – 1 to 2 EOD and Time Projections


Auto ABC (TradeStation)Auto ABC (TradeStation)• Auto ABC Pattern detection without any delays• Any Time-Frame/Chart (Intraday, EOD) • Provides Entry, STOP and Targets dynamically y g y y

without any delays• Time Projections • Scans in RadarScreen for Potential ABC Pattern

setups with Trade Info• Fully customizable


Auto ABCAuto ABC


ABC Scans in RadarScreenId tifiIdentifies

Retracement C%, ,#Bars

Entry Stop TargetsEntry, Stop, TargetsPerfect ABC


ABC TYPES


ABC RadarScreen Scans


ABCs in OptionsABCs in Options


ABCs in Optionsp


ABCs in RangeBarsABCs in RangeBars


ABC Videos onABC Videos on

YouTube

ID: surinotes


Market Context


Market ContextMarket ContextHow ABCs formed relation to the Key levels, Fib. Bands

Intraday: Key price Levels: Floor, Globex and OR Pivots Fib B d K t d i t l l Fib. Bands, Key support and resistance levels ABCs originating or terminating in Fib. Zones

For Daily or Weekly Charts:

Location of the pattern Location of the pattern Weekly, Monthly and Yearly Pivots Price reaction to the Fib. Bands and MAs


Fib. GridFib. Grid

• Shows Pattern Support/Res StructuresShows Pattern Support/Res. Structures • Tools

Fib i B d– Fibonacci Bands– Pivot Structures (Floor, Globex, Fib. Zone)

S– Market Structures – Key Moving Averages

• 21 EMA, 89 EMA, 200 SMA


ABC Bullish with Fib. Bands


Fib. Grid with ABCsFib. Grid with ABCs


CMI (Combined Market Internals)CMI (Combined Market Internals)

• Finds the Underlying Market Directiony g• Uses ADV, DECL, TICK, TRIN, XLF,

SPY, ESINX• Intraday Indicator• Plots a Histogram on 5m Chart• CMIRibbon plots 4 key components on• CMIRibbon plots 4 key components on

1m Chart (used for Trade Triggers)• Trade with the 5m CMI directionTrade with the 5m CMI direction• Also used for Divergence


Combined Market Internals (CMI)Combined Market Internals (CMI)


CMI (5m)CMI (5m)


Perfect ABC Trade SetupPerfect ABC Trade Setup


Perfect ABC in S&P 500Perfect ABC in S&P 500


Perfect ABC in SP500


ABC Bullish (TEVA)ABC Bullish (TEVA)


ABC Bullish (TEVA)ABC Bullish (TEVA)


ABC Bearish & H&S (INFY)ABC Bearish & H&S (INFY)


ABC Bearish & H&SABC Bearish & H&S


ABC Bearish & H&S (INFY)ABC Bearish & H&S (INFY)


ABC Bullish (@ES Intraday)ABC Bullish (@ES Intraday)








Embedded Patterns


ABC within Elliott Wave


EW Trade Example


Symm. Triangle and ABCSymm. Triangle and ABC


Xerox ABCXerox ABC


Xerox ButterflyXerox Butterfly






Inv. H&S and ABC PatternsInv. H&S and ABC Patterns


Book (English & German)


Book300 Pages8.5” x 11” Book

65 Patterns225+ Chart Illustrations225+ Chart IllustrationsPrecise Entries/ExitsSpecific Targets/Stops

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