Dragon pattern is an upside down Dragon pattern with trading rules that are similar to Dragon rules. And this allows a trader to trade with the optimal risk-return ratio. There should be a peak between the Dragons feet or before the 2nd low (local high correction of the downtrend which is called the «Dragons hump». Dragon patterns work in all timeframes and in all market explication forex 1 100 instruments. MON retraced about 43 into the prior swing to form the hump at 100.62.
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HOW TO trade with THE dragon pattern. Trendline is connects head and swing high at hump level. Major market bottoms or market tops involve a series of turning points (swing highs in M-Tops or swing lows in W-Bottoms) followed by some congestion before picking a trend or counter-trend direction from prior moves. The completion of second swing low signals a potential Dragon formation. A chart pattern that offers great opportunity to profit with a clear framework and trading rules is the Dragon. The rules for the Bearish Dragon are similar but in reverse. But it does not mean this pattern should be ignored in the trade process. On January 10th, the second leg was formed as price retraced from the hump area to 12420. Anatomy of a Dragon Pattern,. Enter a short trade below the trend line.