The Three Day Cycle & Parabolic Trade Setups | Stacey Burke

There are only three things price can do:
1. Breakout from a Range and Trend.
2. Breakout from a Range and Reverse.
3. Trading Range between Highs and Lows.

 

 1. Structure / Pattern

•  Do we have any larger geometrical patterns?
•  Head and Shoulders / Sell (Reverse Head and Shoulders / Buy)
• Descending Triangle (Sell) Ascending Triangle (Buy)
• Double Bottoms (Buy), Double Tops (Sell)
• Rectangles (Continuation / Reversal)
• Helps us identify geometric patterns for potential measured move profit targets for asymmetrical risk / reward.

I am mainly focused on horizontal ranges no matter what the geometrical pattern is. (The high and the low of the structure, typically this will be numbered “boxes” of 25-50-100 pips.) Numbers are horizontal. I DON’T TRADE DIAGONAL TREND LINE BREAKS.

2. High of the Day (HOD) / Low of the Day (LOD)

 

Where is the high, where is the low? There is a high and a low that the market is trading inside of. The market is either in a consolidation or a break out. The current HOD and LOD may be inside of a larger rectangle.

3. Timings

 

My focus is on the 3 hour window. 1 hour before the equity markets open, the hour of the equity markets open, and the hour after the equity markets open. Hence 12 - 15 minute candles.

• ASIA 8-11 pm NY EST
• EUR / LONDON 2-5 am NY EST
• NEW YORK 8-11 am NY EST

This allows me to have laser-like focus for some simple recurring setups that occur frequently enough for selling, buying or trend trading setups. This repeatable cycle is recurring in all three 12 candle windows. Whether or not the range, the pattern and a good risk / reward trade setup is in each window is unpredictable.

4. Round Numbers

 

Typically these trades will come off of round numbers, specifically 00’s and 50’s. The quarter levels, 25 and 75 will often be a “stop hunt” extension of a 50 or 00 trading box.

5. Price Behaviour for Trade Setups

 

I look for engulfments and pin hammers. These can be “with trend” trades, or reversals, for stop hunts or in a trading range.I look to ENTER the majority of my trades “AT OR NEAR” number, i.e. 25, 50, 75, 00. Sometimes I may limit order these trades, others I may just get filled at market.

• “M” PATTERNS - TYPE 1,2,3
• “W” PATTERNS - TYPE 1,2,3

6. Risk Management / Profit Targets

 

My average STOP LOSS is 1 ATR. For most of the pairs it will be 20 pips. The GBPAUD, GBPNZD may be 25. Depending on the level of volatility on the day, on the pair, it may be a bit more or less give or take. Typically though, I am looking for a 1 bar stop. Position sizing can depend on the type of setup, and the size of stop loss.

The minimum PROFIT TARGET is usually 50 pips. Sometimes a market may hit a previous day’s high or low, or the current day’s high or low, OR SIGNIFICANT ROUND NUMBERS, 00, 50, and the market may stop there. I may only be up 40 pips. When those levels are prominent, it may be necessary to adjust that target on the day, based on HOW PRICE BEHAVES when it gets to those levels. Other trades (Measured Moves) may be in the area of 50-75 or a 100 or more pips. Again, depending on the setup and how that pair is trading on the day.

7. Trade Management / Self Management

 

Once I am in the trade, I will fight every urge that I have to interfere with it. I review the trade setup and thesis that I have for the trade. I monitor the behaviour initially based on my thesis. I will typically leave the screen, or watch, and monitor myself, self talk, do meditation, and possibly review the other pairs to identify any other setups.

 

I will normally NOT ADJUST my stop loss to BREAK EVEN UNTIL, the market has broken a high or low boundary, ( I wait for the 15 min candle to close) OR it has CLOSED 30 pips or more, breaking into the next quarterly range. At 40 pips, depending on if the market has moved (fast or creeping) I will potentially look to LOCK IN 40 pips if the market has “two-sided” trading occurring near my profit target. So, to clarify, if it has spent 30 minutes near my target without hitting it, I will be watching closely to “LOCK IN” profits, in case the market is preparing to reverse. When you are up 40 pips, YOU NEED TO GET PAID.

 

Quoted from:

 Stacey Burke - 50 Pips a Day - Basic Rules - 12 Candle Window - 15 Minute Charts.

 

 Dump & Pump Pattern.

 Pump & Dump Pattern.

 

Reference:

Stacey Burke Trading - YouTube Channel.

Stacey Burke (2022) - Best Trade Setups Playbook.

Stacey Burke related articles on TPR.

Aksel Kibar (Jan 01, 2022) - Classical Chart Patterns in Global Equity Markets.

Peter L. Brandt & Bruce Babcock Jr. (1990) - Trading Commodity Futures with Classical Chart Patterns.

 

Stacey Burke - Three Day Trading Setups.

 

Aksel Kibar - Type 1 Breakout: Breakout NOT followed by Pullback.

 

Aksel Kibar - Type 2 Breakout: Breakout followed by Pullback.

Aksel Kibar - Type 3 Breakout: Breakout followed by hard Re-Test of Pattern Boundary.

And then there is the so called 'Failed Breakout' when price fails to continue

moving in the breakout's direction and instead reverses course.

S&P 500

 

S&P 500 (monthly bars - quarterly, monthly ranges) 

 

S&P 500 (weekly bars - quarterly, monthly, weekly ranges)

  Five weeks of rise. Move above July 27, 2023 quarterly high makes last quarter of 2023 

an Outside Quarter Range (as in NDX and DJI already). March 27, 2022 high next quarterly level.

 

S&P 500 (daily bars - monthly, weekly, daily ranges)

 Most recent example of outside quarterly reversal in January 2022; to the downside:

quarterly levels breached, daily and weekly reversals triggered. 

 

89.8% of S&P 500 stocks above 20 day moving average.

 Dec 4 (Mon) Moon at apogee and Mercury at  greatest elongation east (previous examples HERE).

Third lunar quarter starting Dec 5 (Tue). Tuesday to Friday major red news.

Weekly Opening Range Breakouts & Daily Range As Multiple Of Asian Range

 

Reference:
Stacey Burke (2023) - Trading Inside or Outside the Daily and Weekly Range.
TPR (2023) - The Weekly Opening Range & ICT Weekly Range Profiles.

 

 The ICT 2022 Mentorship Trading Strategy.

US Stock Indexes | Shallow Retracement Into Early-Mid-December Now Likely

Dow Jones Industrial Average (weekly bars)

Dow Jones Industrial Average (daily bars)

Monthly weekly and daily trends are up. 

S&P 500 (weekly bars)

S&P 500 (daily bars)

Eleven days, three levels and nearly 6 * ATR above the re-accumulation low of November 9.

 

Nasdaq 100 (weekly bars) 

Nasdaq 100 (daily bars) 

CNN Fear & Greed Index (daily bars).

 NYSE McClellan Oscillator (daily bars)

 

CBOE Volatility Index (monthly bars). Very close to multi-year lows.

SPX Put/Call Ratio = 1.63 for Nov 24 2023.

 

 Seth Golden (Nov 25, 2023):
The Trifecta of Overbought Conditions:
92% of SPX above 20-DMA, highest in 2+ yrs
McClellan Oscillator > 80+
S&P 500 2 std. above 50-DMA (RSI also 70+)

 

 

 

Four weeks+ of price expansion beyond daily, weekly and quarterly levels. Last week narrow daily and weekly ranges. Multi-month inflation melt-up? Possible. Allen Reminick suggests a creep up into November 27 (Mon) or December 1 (Fri) followed by some rather shallow 23-50% move down into December 8 or mid-month, some X-mas rally, sideways into January 12 and up into March-April 2024. Possible. [ Allen Reminick (Nov 20, 2023) - S&P 500 Projection Into June 2024 ]

 

See also:

Richard Wyckoff's Distribution Schematics. 

Stacey Burke Style Trading in a Nutshell | Cameron Benson

Reference:
Cameron Benson (Sep 02, 2023) - Simplest Trading Strategy of all Time [Stacey Burke Style]. (video)

See also:

 Cameron Benson (Aug 20, 2023) - Three-Push Reversal Patterns.

Cameron Benson (May 27, 2023) - Trading the Pump & Dump Pattern.

Cameron Benson (Apr 27, 2023) - The 3 Day Cycle.
Cameron Benson (Apr 27, 2023) - The 3 Week Cycle.

Stacey Burke Trading - YouTube Channel.

Three-Push Reversal Patterns | Cameron Benson

There are a lot of varying opinions about how the market moves, such as the Wyckoff method, Elliott Waves, Stacey Burke Trading, Steve Mauro’s BTMM, etc. However, one thing that all of these methods and models have in common is that the market moves in three pushes.

 

In all timeframes price is always in some three-push pattern. Price develops in fractals, and everything happening on a higher time frame happens far more frequently on lower time frames. Be aware of Other Time Frame (OTF) traders, of previous monthly, weekly, and daily highs or lows. It helps us to identify liquidity areas. Where are the entry and the stop loss orders? Where is the money, at the upper or at the lower end of a range?

 

After the third push into one direction, price is going into consolidation. During the second push retail-traders believe that price is going to continue in the same direction, and everybody jumps in. This is the market maker’s trap to harvest entry and stop loss orders during consolidation. The third push is already part of a larger peak formation reversal pattern. 

 

Al Brooks: Wedges and other Three-Push Reversal Patterns.

There are four different variations of the three-push pattern that can be observed on all timeframes:             

 

          1.             3 Levels, also referred to as ‘stair stepping’.
            2.             3 Pushes:
                                a.   Stair Step.
                                b.   1, 2, Pause, 3.
                                c.   1, 2, 3.
                                d.   1, Pause, 2, Pause, 3.
                                e.   3 Burst Impulse Candles.
            3.            3 Pushes out of consolidation in any of the above listed variations.
            4.            Working Levels (3 Pushes)
                               a.   Triple Tops.
                               b.   Triple Bottoms.  

 

Quoted from:
Cameron Benson (2023) - Decoding the Market Movement Algorithm. (video)

 

Three Pushes and Levels out of consolidation:
The Bearish and the Bullish Market Maker Cycle.

See also:
Stacey Burke (2022) - Three-Push Patterns. (video)

Stacey Burke (2022) - Best Trade Setups Playbook. 

Al Brooks (2011-2012) - Trading Price Action: Ranges, Trends & Reversals.

ICT Daily Range Profiles | Michael J. Huddleston

1. The Classic Buy Day or Sell Day Template

This is the best template to make money since it is a wide range trending day that unfolds mostly on Monday, Tuesday and latest on Wednesday during the London session. The New York session will eventually give a retracement to continue with the trend that was set during the London session. The daily range will last for 7 to 8 hours once the profile is established.

 

Mostly it will give a rally or drop from the daily opening price to the low or high of the day during the London session. The trend usually lasts into 11:00 EST.
 

2. The London Swing to Z Day Template

This template is found in the middle of a larger price swing when the trend is exhausted after a large explosive move. It is a narrow range day and ideally occurs on Thursday. 

Price will initially drop below the opening price, then run above the opening price and go back to the range into consolidation. It first appears to unfold as the Classic Buy or Sell Template. But if it continues consolidating, do not look for continuation into the New York session. Take profits.
 

3. The London Swing to New York Open / London Close Reversal Template

The bullish version of this template always begins like a Classic Buy or Sell template with a decline below the opening price before price starts rallying. Once price drops, a buy entry forms, price rallies to a higher time frame Point of Interest (POI). If this happens during the New York session, it indicates a classic market reversal. 

The template is used to either reach for a bearish order block on a higher time frame, for a turtle soup raid or to close a range. On a bullish day it will first create an initial low of the day during the London session, run up and create the high of the day during the New York session around the London Close, then run back down and clear the initial low that was created during the London session. Ideally it can pan out after the market is in exhaustion based on the higher time frame's dominant trend.
 

4. The Range to New York Open / London Close Rally Template

Generally this template is to be expected on days with high or medium impact news events like interest rate announcements, etc. Ahead of these events price will remain in consolidation during the Asian and London sessions. Lows will be cleared initially and after the news price explodes into a directional move.

 

  

5. The Consolidation Raid on News Release Template

Unfolding during the New York session on days with high impact news, mostly FOMC press releases. During and shortly after the news old highs and lows of prior consolidation levels will be taken out. Ideally buy when a low is taken out and sell when a prior high was breached.

 

 

 6. The London Swing to Seek & Destroy Template

This is the kind of day that won’t make you money. The Market Makers clear intention is to take out both buyers and sellers. Initially it would give you a London Open opportunity and setup, but very likely that won’t come to fruition. The narrow range zig-zag template lasts throughout the New York session and will oftentimes create an inside day. The template is usually applied in the middle or at the end of a larger price swing. 

Reference:
Michael J. Huddleston (2015) - ICT Intraday Trading Templates.

See also:

Michael J. Huddleston (2017) - ICT Weekly Range Profiles & Intraweek Trading Templates.
TPR (2022) - The Daily & the Weekly Market Maker Cycles & ICT Intraday Trading Templates.

TPR (2022) - Daily Range = Accumulation + Manipulation + Expansion + Distribution (AMD).

TPR (2022) - Richard D. Wyckoff's Accumulation & Distribution Schematics. 

ICT Weekly Range Profiles | Michael J. Huddleston

 

 

 

These profiles are conceptual models that describe typical patterns in how prices might behave during a trading week. Each profile has unique characteristics that can guide traders in anticipating potential market movements. However, it’s important to note that these profiles are not rigid predictions but rather frameworks to understand market tendencies. 

 

The weekly price movement in financial markets follows a recurring pattern of consolidation, expansion, reversal, expansion again, consolidation, and a potential reverse or retracement:

1. Sunday Open Consolidation: The week often begins with price consolidation on the Sunday open, reflecting a cautious approach as traders assess the weekend developments.
2. Monday Expansion: As the trading week gains momentum, Monday is typically marked by an expansion phase. This reflects increased activity and movement as traders react to new information.
3. Tuesday Reversal: The following day, Tuesday, often witnesses a reversal in price trends. This can be attributed to traders reassessing their positions after the initial expansion phase.
4. Wednesday Expansion: Midweek, the market tends to experience another expansion phase. This reflects a renewed bout of activity and movement in response to evolving market dynamics.
5. Thursday Consolidation: On Thursday, there’s often a consolidation phase. Price ranges may narrow as traders assess the overall sentiment and prepare for the end of the trading week.
6. Midweek Friday Reverse or Retrace: As the week approaches its close, Friday may see a reversal or retracement in trends. Traders might adjust their positions before the weekend, leading to a shift in price direction.

This weekly cycle reflects the rhythm of market sentiment and participant actions throughout the trading week.

 

Reference:
The Inner Circle Trader (2017) - ICT Mentorship Core Content - Month 07 - Short Term Trading Defining Weekly Range Profiles.

See also:

 Michael J. Huddleston (2015) - ICT Daily Range Profiles & Intraday Trading Templates.

The Inner Circle Trader (2016-2017) - Premium ICT Mentorship Core Content Lectures.

The Inner Circle Trader (2016) - ICT Mentorship Core Content - Month 04 - ICT Fair Value Gaps FVG. 

 Stacey Burke (2018) - Opening Range and Initial Balance for Daily Trading Setups.
TPR (2022) - The Daily & the Weekly Market Maker Cycles - ICT Intraday Trading Templates.

The Funded Trader (Apr 05, 2023) - ICT Trader Switched From Options to Forex - FVG was a Game Changer | TFT Interview.