M & W PATTENS - VERY COMMON DURING "CHOPPY MARKETS"
DURING TIMES OF HIGH VOLATILITY, WHICH CAN PRODUCE QUITE A BIT OF NON-TRENDING CHOP. M AND W PATTERNS CAN BE SEEN QUITE FREQUENTLY, IF YOU KNOW WHAT TO LOOK FOR.
THE FIRST LEG OF THE M OR W IS TYPICALLY A VERY STONG IMPULSE LEG, WITH LITTLE CONSOLIDATION OR PULL-BACKS. ONCE THIS INITIAL LEG ENDS, LOOK FOR A PULL-BACK LEG TO FORM A "V" NOTCH AT THE BOTTOM FOR W PATTERNS AND AT THE TOP FOR M-PATTERNS. THIS IS A VERY NICE INDICATION THAT ONE OF THESE PATTERNS IS ABOUT TO FORM.
I LIKE TO ENTER ONCE THE V-NOTCH HAS FORMED AND THE RE-TEST LEG COMPLETES THE 3RD LEG OF THE PATTERN. ONCE I GET A REVERSAL CONFIRMED BY A HEIKIN ASHI CANDLE COLOR CHANGE, I'LL ENTER THE TRADE. STOP LOSS GOES JUST ABOVE OR BELOW THE SWING HIGH/LOW OF THE RE-TEST LEG.
THE FIRST LEG OF THE M OR W IS TYPICALLY A VERY STONG IMPULSE LEG, WITH LITTLE CONSOLIDATION OR PULL-BACKS. ONCE THIS INITIAL LEG ENDS, LOOK FOR A PULL-BACK LEG TO FORM A "V" NOTCH AT THE BOTTOM FOR W PATTERNS AND AT THE TOP FOR M-PATTERNS. THIS IS A VERY NICE INDICATION THAT ONE OF THESE PATTERNS IS ABOUT TO FORM.
I LIKE TO ENTER ONCE THE V-NOTCH HAS FORMED AND THE RE-TEST LEG COMPLETES THE 3RD LEG OF THE PATTERN. ONCE I GET A REVERSAL CONFIRMED BY A HEIKIN ASHI CANDLE COLOR CHANGE, I'LL ENTER THE TRADE. STOP LOSS GOES JUST ABOVE OR BELOW THE SWING HIGH/LOW OF THE RE-TEST LEG.
