Q: I’m a recent subscriber to your software through Larry Pesavento. I use Ensign Map and was wanting to know how I can tweak a chart with other indicators. I’ve looked at the Pensavento Pattern but I don’t really do much with Fibonacci since I’m not going in and out on an ETF throughout the day. Is there another one or two technical indicators I should be using to predict where the market is going for the next day or two?
A: Thank you for using Ensign. The Ensign Map, Pesavento Patterns and other tools are great tools and perhaps unique to Ensign. Larry has been very helpful in getting tools like these in our software and then promoting them in the seminars he gives. He uses these tools.
Use the Map with 2 minute charts, and refresh the chart’s data set to have at least 12,000 bars. Check the Maximum Bar setting and Resize Bar setting on the chart property form so the capacity is set to at least 15,000 bars. More is better. Maximum is 65530.
I encourage you to study the Fibonacci material and use the Pesavento Patterns as they are key to how Larry analyses the markets. He is using the Map tool for time, the Fibonacci Levels for a price objective, and Pesavento Patterns for wave patterns. He is taking trades at the intersection of time and price and using risk money management principles to keep emotion out of the trade.
There is no tool that will predict. However the Map does give a suggestion based on statistics of the time when turns might happen, and Fibonacci Levels is a good tool for where turns will happen. And I will add to the list the value of a simple trend line drawn under rising trends and above falling trends. Sometimes the simplest things like a trend line work better than all the complex math others use.
Here is my list of greart articles to read. And read the articles linked to these articles.
Larry Pesavento: “The US Dollar Index is a good example of using technical analysis to determine trends for entries and exits in foreign currency trading in 2011. The strong trending years of 2007 through 2009 have gone by the wayside. Lets narrow down technical analysis to three areas:
- Pattern Recognition – The chart for 2011 has several AB=CD lightning bolt patterns. In addition, there are several Gartley patterns during the year. HM Gartley describe this pattern in his classic book ‘Profits in the Stock Markets’, published in 1937.
- Fibonacci Ratios – Only the four major ratios of the Fibonacci sequence 0.618, 0.786, 1.27, and 1.618 are needed to describe price movement within the pattern recognition signals. These ratios we are the most common and the most reliable. The goal is to keep it simple rather than reinvent the wheel.
- Cycle Analysis – Using standard cycle analysis from Edward Dewey and James Hearst we come up with a nominal cycle of 62 days. This cycle is repeated four times during the year.
Armed with just a few of these technical analysis tools the market mystery behind the US Dollar Index is not really a mystery at all. Trading comes down to risk control and money management.”
Q: I would like to have a DYO that will assign labels to pivots on a simple moving average. These labels would be similar to the labels used by the Pesavento Patterns (Min Size/Bars 0/0). The DYO must be compatible with the new build for Ensign, and must include Double Tops (DT) and Double Bottoms (DB). The Pesavento Patterns do not include these.
A: Add to the chart the average study and the Pesavento Patterns study. Change the DATA POINT selection in the Pesavento to reference the moving average and then the swing points of the average are labeled. Use the LBL selection as the Marker on the top two rows of the Pesavento Patterns property form.