Devin Sage X-Sequentials : Successfull Forecasts and Trading Part 2 (Forex Education)

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By Devin Sage | September 8, 2010 11:10 AM EST

TXA

See the first part

X-Sequentials Patterns & Rules

This article outlines the rules of the three basic X-Sequnetials patterns.

As mentioned in the first article there are three basic patterns :

X-Sequentials X5 pattern ,

X-Sequentials X7 pattern ,

X-Sequentials X4 pattern.

Pattern Rules :

                                X-Sequentials X4 Pattern :

                                                                        X4

A X-Sequentials X4 pattern consists of two same directional movesegments (scheme 1)).

The begining of the first movesegment is termed as "1X4" ,it´s end is labeled as "2X4"

The countermoves endpoint is labeled as "3X4".

The last movesegment is termed as "4X4" (scheme 2))

Basic Projection Rules of Price Targets with the X4 Pattern - Bullish Price Projections:

Basic X4 Projection :

Connect point 1X4 with 2X4 and extend a line over point 3X4.

Draw a vertical line from point 3X4 and connect this vertical line with the extended 1X4-2X4 line. (scheme 3).

In order to project the next high after the low 3X4 extend the connection point with a horizontal line to the right side of your chart. (scheme 4))

Extended X4 Projection:

Connect point 1X4 with 2X4 and extend a line over point 4X4.

Draw a vertical line from point 4X4 and connect this vertical line with the extended 1X4-2X4 line. (scheme 3).

If the upmove after the first projected high (basic X4 projection) continuous you can project the next turning point by drawing a vertical line from point 4X4 to the extended 1X4-2X4 line .

Extend this connection point with a horizontal line to the right side of your chart. (scheme 4)).

Basic Projection Rules of Price Targets with the X4 pattern - Bearish Price Projections:

Basic X4 Projection :

Connect point 1X4 with 2X4 and extend a line over point 3X4.

Draw a vertical line from point 3X4 and connect this vertical line with the extended 1X4-2X4 line. (scheme 3).

In order to project the next low after the counterhigh 3X4 extend the connection point with a horizontal line to the right side of your chart. (scheme 4))

Extended X4 Projection:

Connect point 1X4 with 2X4 and extend a line over point 4X4.

Draw a vertical line from point 4X4 and connect this vertical line with the extended 1X4-2X4 line. (scheme 3).

If the downmove after the first projected low (basic X4 projection) continuous you can project the next turning point by drawing a vertical line from point 4X4 to the extended 1X4-2X4 line .

Extend this connection point with a horizontal line to the right side of your chart. (scheme 4)).

                                   X-Sequentials X5 Pattern :

                                                                        X5:

 

A X-Sequentials X5 pattern consists of 5 points !

 

Bearish X-Sequentials X5 Pattern :

For a valid bearish X-Sequentials X5 pattern following internal relations are necessary :

1X5>3X5 and 5X5>3X5 /3X5<=>5X5

3X5<=>5X5/1X5<=>3X5<=>5X5

1X5<3X5 and 3X5<5X5

2X5>/<0X5

2X5>/<4X5

0X5<=>2X5<=>4X5

Scheme 3) exhibits the X-Sequentials X5 patterns connective line setting to derive forecasts in price and time.

Point 1X5 has to be connected with point 3X5 and extended over point 5X5.

Point 2X5 has to be connected with point 3X5 and extended over point 5X5.

Relative to point 5X5 a vertical has to be connected with the boundaries of the extended 1X5-3X5 and 2X5-3X5 lines (green) .

 

With a bearish X-Sequentials X5 pattern you locate a reversal .

To project the upcoming donwmove in price you have to replace the vertical line donwnwards at the 1X5-3X5-5X5 connective line and at point 5X5.

Draw a horizontal line to the right side of the chart.

To project the upcoming downmove in time you have to extend the vertical line relative to point 5X5 ,which is connected to the boundaries of the extended 1X5-3X5 line and extend the connection point with a horizontal line to the right side of the chart ´till to the the extended

2X5-3X5 line (green horizontal line).

Bullish X-Sequentials X5 Pattern :

1X5<=>3X5 and 5X5>3X5 /3X5<=>5X5

3X5<=>5X5/1X5<=>3X5<=>5X5

1X5<3X5 /3X5>1X5 and 5X5>3X5

2X5>/<0X5

2X5>/<4X5

0X5<=>2X5<=>4X5

Scheme 3) exhibits the X-Sequentials X5 patterns connective line setting to derive forecasts in price and time.

Point 1X5 has to be connected with point 3X5 and extended over point 5X5.

Point 2X5 has to be connected with point 3X5 and extended over point 5X5.

Relative to point 5X5 a vertical has to be connected with the boundaries of the extended 1X5-3X5 and 2X5-3X5 lines (green) .

With a bullish X-Sequentials X5 pattern you locate a reversal .

To project the upcoming upmove in price you have to replace the vertical line upwards

at the 1X5-3X5-5X5 connective line and at point 5X5.

Draw a horizontal line to the right side of the chart.

To project the upcoming upmove in time you have to extend the vertical line relative to point 5X5 ,which is connected to the boundaries of the extended 1X5-3X5 line and extend the connection point with a horizontal line to the right side of the chart ´till to the the extended

2X5-3X5 line (green horizontal line).

                      X-Sequentials X5 Pattern Schemes

The following schemes are demonstrating possible X-Sequentials X5 Patterns.

Only price projections are considered.

Time Projections will be treated in the real examples.

Bearish X-Sequentials X5 Setups

1)


2)


Bullish X-Sequentials X5 Setups

1)


2)


Following next are real examples of X-Sequentials X5 Patterns and their projections in price and time.

 

The application of the X-Sequentials approach is based upon the projection of derived scale values (refer to Article Nr.1) which are equal to the markets next unfolding pattern and their own different scaling in price and time .

It is still necessary to consider possible deviations.

In the first article they I used the term "variation space" .

This means that partial relations of the quantified scale values has to be considered.

Chart 1:


In this example we see the german Dax Future Continuous chart and a bullish X-Sequentials X5

pattern.

The time target of the uptrend 5XZ was projected exactly.

At the price target projection it was necesary to consider the scalings variation at point 4X5 and

it´s relative connective lines (red vertical line).

Always try to match the price projection with the time projection .

Chart 2:


We see a X-Sequentials X5 pattern.

In order to project the low of the move 5XZ the scaling variation had to be subtracted (red vertical

line ,relative to point 4X5 .It´s possible to derive those scaling variations simply by connecting

point 4X5 with the 1X5-3X5 extended line and use it´s ½ value).

Chart 3:


We see a X-Sequentials X5 reversal pattern.

The price target was projected with it´s scaling variation (as mentioned before :simply connect

point 4X5 with the 1X5-3X5 Line and use it´s ½ value).

The time target projection deviated several bars but hit the bottom literally perfect.

Chart 4:


We see another X-Sequentials X5 reversal pattern.

To project the low it was necessary to use a twofold price projection and the consideration of

the full scaling variation ,which had to be added to the twofold price projection (green line -most of the time only the ½ value has to be considered)

The regular time target projection hit -with a slight deviation- the first 5XZ move.

The extended ½ time projection exactly projected the bottom 5XZ2.

The extended 1:1 time target ,projected the following countermoves high.

Chart 5:


We see a X-Sequentials X5 reversal whose price target was projected by considering the scaling variation.

It was added to the regular price target projection line .

Basically a price target zone was constructed.

The time target was projected too.

The scaling variations of the X-Sequentials time target projections are always the first segment of the unfolding 5XZ move ( green box ,added to to the regular time target projection).

                                  X-Sequentials X7 Pattern :

                                                                        X7:

A X-Sequentials X7 pattern consists of 7 points !

Bearish X-Sequentials X7 Pattern :

For a valid bearish X-Sequentials X5 pattern following internal relations are necessary :

1X7>3X7 /5X7>3X7

1X7<=>3X7<=>5X7<=>7X7

7X7>5X7>3X7-3X7<1X7

2X5>/<0X5

2X5>/<4X5

4X7>/<6X7

2X7<=>4X7<=>6X7

Scheme 3) exhibits the X-Sequentials X7 patterns connective line setting to derive forecasts in price and time.

Point 1X7 has to be connected with point 5X7 and extended over point 7X7.

Point 2X7 has to be connected with point 3X7 and extended over point 7X7.

Relative to point 7X7 a vertical has to be connected with the boundaries of the extended 1X7-5X7 and 2X7-3X7 lines (green) .

With a bearish X-Sequentials X7 pattern you locate a reversal .

To project the upcoming donwmove in price you have to replace the vertical line donwnwards at the 1X7-5X7 -exetended over point 7X7- connective line and at point 7X7.

Draw a horizontal line to the right side of the chart.

To project the upcoming downmove in time you have to extend the vertical line relative to point 7X7 ,which is connected to the boundaries of the extended 1X7-5X7 line and extend the connection point with a horizontal line to the right side of the chart ´till to the the extended

2X7-3X7 line (green horizontal line).

                      X-Sequentials X7 Pattern Schemes


The following schemes are demonstrating possible X-Sequentials X7 Patterns.

Only price projections are considered.

Time Projections will be treated in the real examples.

Bearish X-Sequentials X7 Setup

 

1)


2)


Bullish X-Sequentials X7 Setups

1)


2)


Following next are real examples of X-Sequentials X7 Patterns and their projections in price and time.

 

The application of the X-Sequentials approach is based upon the projection of derived scale values (refer to Article Nr.1) which are equal to the markets next unfolding pattern and their own different scaling in price and time .

It is still necessary to consider possible deviations.

In the first article I used the term "variation space" .

This means that partial relations of the quantified scale values has to be considered

Chart 1 :


We see a X-Sequentials X7 pattern .

It´s price projection hit the low 7XZ

It´s ½ time relation projected the 7XZ low

The regular 1/1 time relation projected a minor top.

Chart 2 :


Chart 2 shows a X-Sequnetials X7 reversal pattern.

The price target of the downmove 7XZ was projected at point 7X7 .

The market formed a double bottom at the projected price target range.

To project the time target of the low the ½ relation of the regular time target projection was necessary.

Chart 4 :


Chart 4 shows another X-Sequentials X7 reversal pattern.

Only the time projections are considered.

The absoulute low was projected with the extended ½ time projection relation.

The following countermoves high was projected with the extended 1/1 time projection.

 

The next article will be a treatise about how to locate X-Sequentials Patterns correctly.

 

Yours sincerely ,

Devin Sage

www.Technische-X-Analyse.de

See the third part

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