Bullet Catch Pattern. LNTH At Short Zone With Excellent R/R.
Normally I use pure price action to make my trades. This however, is a pattern I've noticed based on some of my best trades over the past year with probably about an 80-90% strike rate when I find one.
So let's call it the "Bullet Catch Pattern".
You notice that over a large number of candles, price has done a slow, steady reversal in either the upward or downward direction. In this case, it's a short setup so it's a slow downward curve from the high.
In this case, there is an inverse cup that is 10 candles wide, and an impulse move (the bullet) that is 4 candles wide. The number of candles isn't important, but the catch should be significantly wider than the bullet. It's the ratio that matters.
Also, in this case, we see that trend has shifted down as evidenced by the candle body close below the orange line. I can't stress how important this is. If you don't fully understand trend and when it's invalidated, check out Tradersumo's video on it on Youtube.
So, despite the impulsive bullet move up, we now have two reasons to believe it will terminate at the high or just above it, and will reverse to find a new local low.
The stop loss is shown here in a conservative place for the safest reward/risk. But, if the r-r is really good, I will often widen my stop as the best entries on these occur in the liquidity zone just above the high, and since these setups have pretty good odds of playing out as expected, I'm willing to sacrifice some r-r and possible slippage in exchange for the best entry. You could also improve the r-r at the higher fill above the ATH by moving the entire red zone and stop loss up slightly above the high, but you risk not getting filled.
I managed to get a literal perfect Google short entry on Feb. 2, 2022 despite the news being super bullish. They beat earnings that day and the market simply filled my short just above all time high, which were there because the bullet catch pattern was pretty clear. Pull up a chart and look at that daily candle. It's a perfect example of an above the catch fill. I happened to open up that chart at the perfect moment, saw the bullet catch and smashed a short at was is still the all time high.
GO was another ticker that gave the pattern on the weekly giving a perfect entry. Apple was another one I caught a perfect entry on on Aug. 15, 2022. And as I typed this, I noticed one on the Russ that I just took on the 15 minute chart that just played out perfectly. Price was above the catch and it was just a liquidity grab, so I entered there where I assumed the market makers' short orders were.
If you see this pattern anywhere, DM me. Especially on the weekly or monthly time frames. I love when it wicks above the catch like it did on Google that day. You couldn't ask for a better entry.
Let me know below if you have any questions about this pattern and how to use it.
So let's call it the "Bullet Catch Pattern".
You notice that over a large number of candles, price has done a slow, steady reversal in either the upward or downward direction. In this case, it's a short setup so it's a slow downward curve from the high.
In this case, there is an inverse cup that is 10 candles wide, and an impulse move (the bullet) that is 4 candles wide. The number of candles isn't important, but the catch should be significantly wider than the bullet. It's the ratio that matters.
Also, in this case, we see that trend has shifted down as evidenced by the candle body close below the orange line. I can't stress how important this is. If you don't fully understand trend and when it's invalidated, check out Tradersumo's video on it on Youtube.
So, despite the impulsive bullet move up, we now have two reasons to believe it will terminate at the high or just above it, and will reverse to find a new local low.
The stop loss is shown here in a conservative place for the safest reward/risk. But, if the r-r is really good, I will often widen my stop as the best entries on these occur in the liquidity zone just above the high, and since these setups have pretty good odds of playing out as expected, I'm willing to sacrifice some r-r and possible slippage in exchange for the best entry. You could also improve the r-r at the higher fill above the ATH by moving the entire red zone and stop loss up slightly above the high, but you risk not getting filled.
I managed to get a literal perfect Google short entry on Feb. 2, 2022 despite the news being super bullish. They beat earnings that day and the market simply filled my short just above all time high, which were there because the bullet catch pattern was pretty clear. Pull up a chart and look at that daily candle. It's a perfect example of an above the catch fill. I happened to open up that chart at the perfect moment, saw the bullet catch and smashed a short at was is still the all time high.
GO was another ticker that gave the pattern on the weekly giving a perfect entry. Apple was another one I caught a perfect entry on on Aug. 15, 2022. And as I typed this, I noticed one on the Russ that I just took on the 15 minute chart that just played out perfectly. Price was above the catch and it was just a liquidity grab, so I entered there where I assumed the market makers' short orders were.
If you see this pattern anywhere, DM me. Especially on the weekly or monthly time frames. I love when it wicks above the catch like it did on Google that day. You couldn't ask for a better entry.
Let me know below if you have any questions about this pattern and how to use it.