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Inroducion I don’ wan his book o have dozens o unnecessary pages o maerial ha would do you no good in order o impress you. Ta’s why I’m going o show you he examples and explanaions righ away. In gure below you can see an ordinary chars wih emplae ha you go in he package along wih his book – ha’s a simple emplae ha will allow you clear candles overview ha is necessary in order o noice reverse patern more easily.
I suppose ha his gure doesn’ say oo much, and ha’s he way i should be or now! As you can see here’s a EUS/USD pair on H1 ime rame. Reversal patern gives he bes resuls on his pair and H1 ime rame. My advice is ha you ollow his and all rules ha will come along in his book.
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Bullish UCRP Here’s he same example bu his ime wih Bullish Ulimae Reversal Patern Signals. Tere are welve buy signals in his gure ha are provided by his patern. Now i we would rade using his example wih Bullish UCRP signals, we’d ge eigh posiive and our negaive rades, which isn’ bad aer all. rading his way by using he basics o any sraegy we’d make a good pro. Bu UCRP can ge you even beter resuls, bu we’ll alk abou ha laer.
Blue and red circles represen he Bullish UCRP Signal. Blue circles represen he signals ha would give you a pro, while he red ones would be ake signals.
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Bearish UCRP Now we’ll ollow he same example, only his ime we’ll use he Bearish Ulimae Reversal Patern signals. Tere are 13 sell signals in his gure provided by his patern. Now, i we’d make rades wih his example by using our Bearish UCRP signals, we’d ge one negaive and welve posiive rades. Blue and red circles represen he Reversal Bullish signal in which blue circles would be signals ha would bring you a pro while he red ones would represen he ake signals.
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Suma So ar, in his book I’ve covered he exising marke sae by he ime I wrie his, dae is displayed in he gures. Wih dieren marke condiions you’ll ge dieren resuls and signals, bu more or less ha’s abou he same. Now, he example in gure represens he EUR/USD on H1 ime rame in las ve days on he marke – one rading week. I you would rade wih his patern in las ve days, you’d ge he ollowing resuls: weny (20) posiive rades, and ve (5) negaive rades. Impressive, isn’ i? I we’d use he mos primiive sraegy and coun he pips ha would give you pros by using hese signals, you’d be even more impressed, bu ha’s no ha much imporan a his ime. I’s also imporan o menion ha i would be impossible o rade all signals – ha is only, heoreically speaking, possible i you’d be siting by your compuer 24/7. Bu in he end, ha’s he problem wih ALL sraegies, signals, and sysems. Righ now you migh ge he idea o how o make hese paterns auomaed, so ha you wouldn’ lose ime and money, bu ake my advice and give up on ha one, because i’s IMPOSSIBLE. My eam consiss o lo o programmers which ried and ailed every ime, so sick o his simple manual “Ulimae Candlesick Reverse Patern Sraegy”. Beore I explain you how o make ake signal reducions and by increase posiive rade raio, allow me o explain our Ulimae Candlesick Reversal Patern in deail. Now, you’re probably a bi conused by looking a hese examples, no knowing wha Ulimae Candlesick Reversal Patern sands or.
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Wha Is UCRP? I I’d have o wrie a deniion or Candlesick Reversal Patern ha i would be somehing like his: “Candlesick Reversal Patern consiss o wo las candles on chars wih dieren direcions (one is buy and oher one is sell and vice versa), he end o one represens he beginning o he oher one. Signal is conrmed when he las candle is closed, while is beginning (he price ha made he opening) on he end o previous candle (he price ha made he closing o penulimae candle)”. I you don’ undersand his deniion i doesn’ mater really, I’ll cover i wih he examples displayed in ollowing gures. Aer you ake a look a he examples and read he ollowing ex i will make sense o you. Here’s a gure o las example, I’ve increased he candles in his one so you could see and realize Patern Reversal beter.
In gure above in he example “1 sell” Sell (Bearish) Candlesick Reversal Patern is displayed. Bullish rend preceded and hen he candle closed in sell in poin which hese wo candles go evened. Sell candle is opened in he same price ha closed he lays buy candle. Tese wo candles make Bearish UCRP. For Bullish Reversal Patern example “2 buy” same rules apply bu only in opposie direcion – all is vice versa. 6
So le’s bring back he mos imporan, in examples one and wo you can see he candles ha are evened, ha is very imporan. I candles vary by ew pips (2-5) ha can be ignored, ake a look a he gures a he beginning, which signals were aken as examples and compare i wih his one and you’ll ge i all clear. Anoher imporan hing is ha he las candle should close and only hen we have a good-o-go signal ha Candlesick Re versal Patern is a correc one – don’ open he posiions by any means unil he second candle closes. Only aer i closes he signal can be aken ino consideraion, his is very imporan. Now I’ll explain in deail cerain examples o Candlesick Reversal Patern rom he beginning o his book jus in case ha you didn’ ge i righ wha’s happening in he marke – in ha way you’ll make a beter undersanding o dierence beween cerain paterns rom he beginning o he ex. Te dierence beween paterns is in candle size inside he paterns, he size o sell candle compared o he size o buy candle. Tis migh look o you somewha unimporan bu i you ake a more deailed look a he examples you’ll see ha candle lengh will give us a lo o imporan inormaions abou he curren marke sae. In he nex example he explanaion o dieren candle size will be covered.
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In example “1 sell” gure displays raher srong buy rend, bu aer ha he sell candle closes a lo lower han he previous buy candle. Ta ells us only one hing: he sellers ook over he iniiaive on marke and sudden urnover occurred. Ta’s why his Candlesick Patern is called “Reversal”. Aer srong buy rend sell candle occurs ha closes below he price in which he previous buy candle opened. Ta’s called a sudden marke urnover – i’s an excellen opporuniy o sell since i’s almos impossible NO o pro in ha kind o siuaion. Te example wo is somewha dieren bu i’s a sill good signal. In example “2 Sell” we have a srong Bullish rend again which ends wih long buy candle; many raders avoid rading by using heir own signals in heir sraegies i oo long candle occurs, bu ha’s no he case wih our patern. Te mos imporan hing or you is o undersand wha is happening. As you can see in his example, aer a long buy candle, sell candle closed, long buy candle and shor sell candle make our Ulimae Candlesick Sell Reversal Patern. Bu wha really happened on he marke is ha he buyers orced he EUR purchase, and hen he sellers are rying o urnover he rend ino sell and since here was a oo srong buy rend ha will go a bi slower, since ha’s he momen when buyers and sellers o EUR/ USD pair sruggle. Bu ha’s no wha should ineres us since we have our patern ha poins o sell. Compared o previous example where he sell candle was a lo longer rom a buy candle, now we have he opposie. I hope ha you’ve noiced he dierence. Wih his sory regarding he candle lengh my advice is ha you ake all he signals rom his patern as valid. I jus wan you o undersand beter wha his patern sands or. As you can see here’s a sudden marke urnover ha should be used accordingly. Following his logic i we’d look which sell example has beter chances or success he answer would be “1 Sell” alhough he “2 Sell” example would give us ar more pro. Bu le’s pu ha aside or some oher ime, on Forex nohing is simple; here are oo many acors ha inuence he marke. Le’s summarize his so ar – his chaper is abou he knowing he ways in which Ulimae Candlesick Reversal Patern uncions. Don’ boher yoursel wih deails, jus ollow he paterns and make rades. Now ha you’ve undersood how o recognize he patern and wha he paterns sand or, i’s ime o coninue our sory rom he beginning o his book. 8
Te Bes ime For Using UCRP? I don’ know i you’ve ever analyzed dieren sessions, and i you were hen you probably know when sudden marke urnover would occur. Te answer or his is London and New York session in which you should ignore he beginning o London and he end o New York session since hose are he momens in which no so many ineresing hings occur and i’s possible or you o ge ake signals, bu i’s up o you o make a sraegy on which you’ll make rades every ime you see he signal or jus during he London and New York session. I sugges ha you sick o London and New York. I we go back o examples rom he beginning o his book and analyze our ake signals ha are generaed by Candlesick Reversal Patern we’ll noice ha i’s possible o avoid hose ake signals and decrease heir number and increase our proabiliy.
Figure displays London and New York session, green sands or London session, brown sands or New York session, and he blue represens he overlap o hese wo sessions.
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Tree ake signals are being displayed in his gure: he rs one is sell, and oher wo are buy signals – hese are ake signals rom rs wo examples ha can be avoided i we avoid rading ouside hese sessions, in he beginning and in he end o sessions. In his way he oal number o negaives (5) would be cu down o jus wo ake signals. Te ruh is ha we’d cu down 20 posiive signals o lesser number by sicking o he rule o rading in London and New York session, bu i we’d calculae he percenage o proable signals i would be ar over 90% which is really amazing. In las example M4 session indicaor is included which will allow you a quick and simple visual marke overview by session. Tis indicaor can be simply used in his or your own sraegies or sudying he rend reversal and oher inormaions ha are visible by observing he chars wih his indicaor. Te indicaor has a possibiliy o display hree sessions: Asian, European, and American. In our example I’ve included only London and New York session; you can adjus your session overview o needs. Te indicaor is included in he package which you go, you only have o se he indicaor in older along wih oher indicaors and add i o he char. Believe i or no bu i’s possible o urher reduce he possibiliy o ake signal occurrence which is produced by Ulimae Candlesick Reversal Patern. I’ll explain ha in my chaper “Combining Candlesick Reversal Patern wih your sraegy or plain echnical analysis”. While waching a he gure rom Reversal Bearish Patern I’ve noiced ha I’ve missed one signal, I acually didn’ saw i, and i was a ake as well. I’s hard o mark all signals in las ve days so his lapse is quie normal o happen. In nex gure I’ve marked he conroversial ake signal – maybe you’ve noiced i as well? Signal ha I’ve missed in Bearish UCRP chaper is being marked wih an X, so his signal would probably resul wih a loss since sop loss would be shor. 10
By he ime I’m wriing he res o his ex he price has go on, and we go a new hree signals – all new signals resuled in posiive rade – le’s ake a look a he gure.
I we’d sick o he session rules we would be rading only in examples wo and hree while he signal under number one is given beore London opening. As you can see he signals are sill highly proable and precise. 11
Sop Loss And ake Pro In his chaper (da li je poglavlje? Ako je samo dio poglavlja onda je “par” umjeso “secion”) I’ll be explaining how should you seup sop loss and ake pro limis. You’ve already concluded ha posiions are being opened by he closure o second candle in he patern, hus giving us a conrmaion wheher he signal is correc. Considering he Inraday rading on H1 ime rame I’ll give you ew suggesions ha are based on acs and my long experience. Firs hing is abou sop loss which should span beween 40 and 60 pips, maybe even less i you know wha you’re doing. I’ve used a lo o dieren sraegies and sysems hrough ime, and i proved ha sop loss o 40-60 pips is bes su or inraday shor rades. I you’re using Candlesick Reversal Patern and his ype o sop, you’ll be having abou 90% o success in your rades. Regarding he ake pro, my advice is ha you se up wo ake pros: rs should be a +20 pips, and second one a 50 pips. On rs ake pro you close mos o he opened posiion, le’s say 70%, while 30% posiion is le hoping ha he price will reach +50 pips o pro. Jus consider when closing P1 in pro ha you should move sop loss close o he posiion opening depending on a marke sae. For an example: i you opened he posiion wih 1 lo you should close P1 (20 pips) on 0.7 lo while leaving he res 0.3 lo hoping ha i’ll reach P2 (50 pips). I you’re an experienced rader and have a proable sraegy and money managemen, you can use any echnique wih sop loss and ake pro limis o your liking. In examples above I’ve explained a simple and proable way o seting up sop loss and ake pro limis.
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Combining Your Sraegy or A wih UCRP In examples above I’ve explained he mehod o open posiions based on signal ha is generaed by his Ulimae Candlesick Reversal Patern, how o se up righ sop and ake pro. I you’ve read i all hen you know ha by using he signals o our patern and sicking o he rules and advices will give you a complee sraegy ha can be used very successully in everyday rade. Bu he main purpose o all paterns (and our included) is o help in deciding during he posiion opening. When you ge convinced in efciency o his patern hen i’s ime o combine i wih your sraegy or some simple echnical analysis and ge sel-condence and increase he possibiliy or proable rade. Imagine ha you own a sraegy ha generaes 60:40% signals, 60% posiive and 40% negaive. I you’d included a new rule ino your sraegy, ha he signal o your sraegy has o even wih Candlesick Reversal Patern, you’d increase he raio o 90:10% - 90% o posiive signals. o beter undersand wha I’m alking abou you’ll see in nex examples how o combine Candlesick Reversal Patern wih rendlines, Fibs, Pivos, ec. My advice is quie simple: combine Candlesick Reversal Patern wih sraegy or echnical analysis ha gives you he bes resuls and you’ll hus reduce he number o negaive rades which will resul in incredible pro.
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rendlines And UCRP By looking a chars you made a good opporuniy o open sell posiion based on rendline echnique. ake a look a gure below; you’ve drawn a rend line while realizing ha i’s an excellen resisance, he possibiliy or sell o occur is really big. I you ake a beter a look you’ll noice ha our Bearish UCRP announces rend Reversal, which acually happened; our patern gave you an exra saey and sel-condence, now you’re oally sure ha you righ abou his one.
Tanks o his patern you open up he sell posiion and wha happens?
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Pu. Te bes case scenario occurred – he price wen in esimaed direcion.
Tis is an excellen example how o use our patern in a righ way. I you use rendlines now you know how o combine he patern and ge ha imporan sel-condence because you need o know wha’s acually happening in he marke all he ime so you could be sure ha you’ve made a righ decision. I somehow you’ve made a wrong esimae which resuls in negaive rade, NO BIG DEAL! I’s imporan o know your sysem and wha id does, sick o he rules, and paienly wai or he nex signal. When you know ha your patern works awlessly you don’ need o worry a all.
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Fibonacci And UCRP I you know Fibonacci levels well and regularly use Fibo indicaors, know he way i works and have good resuls hanks o he knowledge o Fibonacci levels, i’s ime o increase he proabiliy o your “Fibo sraegy”. Le’s have a look a his example.
You’ve made your analysis and you’re waiing or he price o come ino area ha will allow you proable rades by using he basics o Fibonacci sraegy. Example 1: he price reached o 50% o Fibo level – his level represens he urnover; i he price bounces o his level ha is usually a srong suppor and resisance (resisance in his case). Wha acually happens is ha he Fibo level is an excellen resisance, hen he Candlesick Reversal Paterns occurs poining o he change o rend o sell. When you have hese wo inormaions you’re in a righ advanage because you know wha o do, aer his you open your sell and make pro. All connoisseurs o Fibo levels know ha he bes chance o open up he posiion is a Example 1. I you know and use Fibo levels you would make a rade wih Example 1, wih he conrmaion rom our patern which leads you o sure pro. In his example I’ve only included sell signals o our paterns. Te res signals wouldn’ be raded by proessional Fibo users. 16
A And Candlesick Reversal Paern I hope you’ve undersood wha’s he bes way o combine paterns wih indicaors and oher sraegies. Any indicaor ha you use everyday can be combined wih his patern. I you’re a ancier o Pivo Poins like me, hen his patern will make i easier or you and increase he proabiliy o your sraegy. Te way o combine his patern wih Pivo Poin is he same like wih Fibs and rendlines; i he price closes below daily pivo per say, Candlesick Reversal Patern is ormed and you’re compleely sae ha he price will go o sell, ec.
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Exaples UCRP
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www.CandlestickReversalPattern.com Copyright © UCRP Roger Peterson Pro Trader & CEO
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