Do you speak the language of forex price movements?
Let’s talk about the language of forex price action today. It will be a provocative article – or an article that is intended to poke you – to raise consciousness of a phenomena that so few people have the eyes to identify in the charts.
Any chart a trader opens, any timeframe a trader selects, there is a phenomena, omnipresent in all charts. Even artificial intelligence can not help but draw it all over the charts when asked to create a candlestick chart.
You have been fighting this phenomena ever since you started your career in trading. The phenomena is a pattern that you can spot in one of the pictures on my website (it is a task for you to search and find it). I call it the ghost pattern because of how it looks like and how omnipresent yet so elusive it is. I consider this pattern as the basic meaningful unit of price movements. All price movements. Once one gets familiar with the nature of it, one can not help but looking at all charts from the perspective of this pattern. This pattern is the reason for all misery of traders because it is being drawn on the chart constantly.
The recognition and study of the basic unit of price movement – the ghost pattern – is what has led me to the concept of functional trading. Because it is not always what you see being drawn is what you should be focusing on when price is moving.
When you try to figure out direction, momentum and timing, you are looking at the basic unit of price movement showing itself in multiple forms, while its parts or the entire pattern is taking on different roles or functions. The pattern is always the same but the meaning of it or its parts keep changing. The pattern and its variations include all strings and notes your emotions can react to, from hope to feeling beaten up, depending on context.
I said that one should not always be focused on what is being drawn as what is being drawn is many times an illusion because the basic unit of price movement and its components act like lollipops that are wrapped in papers of different colors but the lollipop inside tastes like nothing the wrapping paper suggests. One may try to select a lollipop that promises the taste one has desire for but when tasted, it is nothing like what was expected. You get the point? All look like lollipops, all tell you something about the taste of it but when tasted you get a surprise..
You know that I am an advocate of functional trading and I offer a way out of this dilemma by offering an understanding regarding what the same patterns mean in different situations.
As mentioned earlier, this is a provocative article and I want you to use your brain. I did spend more than a year on studying this pattern to arrive to a conclusion that the pattern as a complete pattern is non-conclusive except for the conclusions one can draw on the limits of its properties and tradeability regarding the opportunities inside the pattern and after the pattern is completed.
I want you to go and check your charts on all TFs, identify this pattern and draw your conclusions on it, including entry points. Take your time, it was a 1 year journey for me. There is no need to do a google search, as you will not find this pattern described anywhere. The pattern includes a range, a move out of it and a move back into the range. It looks like a ghost that has a head, 2 legs and 2 arms. You can dissect the pattern further into its components by using whatever tools you have so you have a better understanding of what it is comprised of. If you can not identify the pattern based on my website picture and this description, please comment and ask for my assistance.
Studying this pattern may be the beginning of your journey in your path to a meaningful forex trading experience. I hope you will do a favor to yourself and take on this challenge that is supposed to open up new possibilities for you. Always remember, that trading is a path of commitment where faith is needed as much as the ability to think rationally.
Immerse, Flow & Shine.
Be Empowered,
Andras
