Can't Find a Name for My EMA-expansion Pattern

[David79 10]

I'm familiar with alternation between low and high volatility and how breakouts from tight congestion are often strong, but I've never seen any TA book that shows a particular chart pattern I use to look for the beginning of a strong move. It works best on futures for the major currencies, but occasionally it will also show with CL.

 

OK. The basic setup to look for it (posted elsewhere here a plea for automating that search) is that I have four EMAs of harmonic lengths on all of my charts. I use different colors in rainbow order (ROYGBIV) to instantly recognize each one. It works fine for "standard" EMAs of period lengths 20, 40, 80, and 160 ... which makes sense for a weekly cycle length.

 

Here is a chart of 6BUZ taken a few days ago where there are four places on the chart where the four EMAs all come together (more or less) where they're followed by an upward expansion with the EMAs diverging fan-like with the price leading the way upwards. I try to stay with the rally as long as the four lines maintain their ordering, though they can touch each other without breaking the raly.

 

The Pound was very strong that day because the BoE announced good news on interest rate at 5 AM my local time on graph. Local time is MDT, or GMT-5 usually.

 

First indication was at 3 AM when the EMAs converged at purple Fib line, but the rally was only 20 ticks from 1.652 to 1.654 and then failed in about 20 minutes.

 

Second indication of the start of a day-long rally was at 5 AM when the BoE news was announced. Now here it gets a little tricky because although the lines all come close together, they probably never hit each other within a tick or two. So the alert algorithm needs to be flexible in specifying the delta between the EMA lines, though i'd guess that it should always be at most 5 ticks. The take-off point from there was, again, that same purple Fib line and roughly 1.652. But instead of petering out, the rally stayed intact with fan lines in order until noon, when it topped out just after noon (7 hours later) at 1.668 for a roughly 160-tick gain.

 

Third indication on same day was at 8 PM at a price of 1.665. The fan stayed intact until some choppiness near the end but it topped out a day high of 1.6742 exactly. Closing it out at the 1.6740 grid line is 90 ticks.

 

Add up the ticks from the three rallies and it's 20 + 160 + 90 = 270 ticks on a $6.25/tick contract, or over $2 K for a nimble trader taking on very little risk, at least that day, tarding just one contract and not pyramiding after learning the BoE news and reason for second rally.

 

Questions:

1: Does this EMA chart pattern for start of strong moves have a name?

2: Would anyone be interested in coding it in EasyLanguage or C# as Custom Indicator that will compile clean with the openecry platform? The lastest OEC is pure.NET and it emulates EL, so if anyone can write it in C# I should be able to get it to work with OEC.

 

David

 

P.S. Sincere apologies for posting very similar questions and requests in two places here. The posts are unique, but both use same graphic. Other post at Getting Started with Openecry, but this one is written for broader community. I'd post a link but that other post is waiting for moderator approval.

[Tams 20]

you have to add some annotations on the chart, with arrows pointing to the key features you are talking about. Otherwise it is just a guess-watchamean game.

[nkhoi 10]

it's the bow-tie pattern

http://www.tradingmarkets.com/.site/stocks/education/lssnoftday/05302003-33157.cfm

[David79 10]

it's the bow-tie pattern

http://www.tradingmarkets.com/.site/stocks/education/lssnoftday/05302003-33157.cfm

 

Not hardly. Bow-tie is a continuation pattern where entry is attempted on first pullback.

 

My EMA convergence signals the end of a consolidation period and exact point of the *beginning* of a new trend.

 

Thanks for looking.