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Tuesday, 25 December 2018

Parabolic Curve Pattern, CAurve of the Forex Trend Conqueror Section

Have tried trading all kinds of price patterns but still haven't enjoyed big profits? It's time to try the Parabolic Curve pattern. This curved line pattern appears relatively rare, but if you are able to find it, the opportunity to harvest profits is in sight.

What Is the Pattern of a Parabolic Curve?
The Parabolic Curve pattern is a curved line pattern that is formed by following a candlestick formation when prices rise or decline rapidly. Visually, the curved line pattern follows the correction points. The lay language, when the price forms a pattern like a staircase, the curved line follows the base on the steps.

Parabolic Curve patterns are generally found when the market is in panic-buying or panic-selling conditions. That is, the price moves to one direction in a short time because it is driven by the dominance of the seller or buyer. In these conditions, the opportunity to gain profits is wide open, especially when the price moves to break through the curved line pattern.

In essence, the pattern of Parabolic Curve indicates the point where prices will begin to approach saturation (overbought or oversold). If the price has touched its saturation point, the price opportunity to reverse direction will be even greater.

Almost similar to trendline, what's the difference?
At a glance the Parabolic Curve function will be similar to Trendline; traders will use it to identify the direction and strength of the trend. However, there are certain situations where one of the trading tools will be more effective. Here's the illustration:

From the chart above, it is clear that the open position signal of the Parabolic Curve is more profitable than the Open Position (OP) signal Trendline. Sell ​​signals from the Parabolic Curve come earlier when the candlestick starts reversing from its highest end. While the OP signal from the new trendline appears later after a new trend has been running.

It can be concluded, the pattern of the Parabolic Curve is more effective than the trendline when the price moves in one direction very quickly. In other words, the slope angle of the price movement can be more than or equal to 45 degrees.

Conversely, if the price moves relatively tiered for a long period of time (slope below 30 degrees), Parabolic Curve cannot be used. In this case, the trendline is more profitable.

How Can You Make Money With a Curved Line Pattern?
Trading strategies using the Parabolic Curve pattern are quite simple. No complicated calculations or combinations of indicators are needed to improve the accuracy of trading signals.

The emphasis of the accuracy of trading signals on the Parabolic Curve pattern lies in the trader's skills in identifying market dynamics through price action charts. Following are the practical steps:

  • Look for currency pairs or other assets whose trend movements are strong; note the price movements in the pair whose price movements have a slope of more than or equal to 45 degrees to one direction and tiered like a ladder.
  • Use the trading tool to draw curve lines; some trading platforms provide a built-in Parabolic Curve tool, for example tradingview. As for MT4, you can still use the help of an ellipse curved line pattern instead of the curve.
  • Pay attention to price movements through candlesticks; if the body of the candlestick appears to break the curved line pattern, the price will have the potential to reverse direction from the previous trend.
  • Open Position with Money Management. After the trading signal appears to open a position, use the basic money management rules such as the percentage of capital and the Risk / Reward Ratio so that the risk of each position can be controlled.

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If you follow the steps above correctly, the chance to profit from a curved line pattern should be achieved consistently. Although occasional trading signals miss or the direction of the trend changes, you can still secure profits with risk management in step four.

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