Three Lines Price Breaks ( 3LPB )

Three-Line Price Break Charts

Technicians are always looking for ways to recognize market direction and market trends.
Mostly technicians use technical indicators to detect signs of momentum shift, rising/falling trends and market volatility for price projections. A price chart gives the visual display of the underlying strength and weakness
of a market. A chart display coupled with trend-indicators, momentum indicators with
support and resistance levels are essential in any technician’s arsenal.

Three-Line Break charts (3LPB) display a series of vertical boxes that are based on changes in prices.
The 3LPB method entirely dispenses with the recording of the volume sales and time data.
The other major charting techniques like Point & Figure, Kagi and Renko Charts also ignore the passage of time and volume.
As Steve Nison describes in his “Beyond Candlesticks” book, “The three-line break chart is a more subtle-form of point and figure charts where reversals are decided by the market and not by the arbitrary rules. That means we can gear it to the strength and dynamism of the market”.

Why Chart Analysis?
The understanding of the effect of supply and demand on any market is necessary for successful investing. When demand is greater than supply, prices move upward. Should supply be greater than demand,
the prices are forced downward. When demand has absorbed all the supply at any given price, it
will begin to absorb the supply available at the next higher price at which offerings are available.
As the demand decreases, prices correspondingly increase. Prices recede as a result of absence of
demand or an oversupply.
The fluctuations of price changes, when plotted by means of the principles of any charting
techniques like Bar Charts, Candlesticks, Kagi or Point and Figure, will more accurately indicate
the technical condition, the relationship of supply and demand, than any other known method, which can be used for the purpose.

An Example of 3LPB Chart
Three-Line Break Charts defines the underlying trend and considered as an adjunct to the
candlestick charts. A basic understanding of “3LPB” is when there are three white successive
candles, the major trend is up and when there are three black successive candles, the major trend is
down. The major reversal signals (based on the “3LPB” technique) are given when the turnaround
lines (white to black or black to white) are formed AFTER CONSECUTIVE 3 BLACK or WHITE CANDLES.

PARSIAL RISE/DECLINE

Chart Patterns Notes

• Patterns indicate the psychology and behaviour of a market whether its trending,consolidating or reversing. Various technical patterns mostly occurred far more frequently than they would have done if they were truly random events. In general,the charts contained useful information about future prices.
• Chart Patterns are Predictive.
• However, identifying Chart Patterns that “work” 100% of the time is difficult (or impossible).
• Rules are needed to assess and trade the opportunities.
• Patterns are morely Art than A Science. The traditional patterns used in technical analysis were, of necessity, fairly crude, determined by what was readily visible to the eye. As a result, technical analysis has always been more of an art than a science.”
• Ambiguity in Chart Pattern Recognition is universal!
• Breaks creates Panic
• Consolidations are the most powerful pattern.Each consolidation will typically imply a move of equal distance from the last significant low or high
• Dont try to create patterns. Wait until clearly formed.
• Better Risk/ Reward can be obtained by trading the Breakout only. Assess the Target and
  initial Stop values. Trade those patterns with a Reward:RiskRatio of at least 2:1and preferably 3:1.
• Failure Patterns gives more breakout that succesful ones. Consolidations usually break in the direction of prior trend but can also reverse in the opposite direction.Such “failed” consolidations can prove highly profitable
• Only trade those Patterns which have a clear size reference in the timeframe. Stay Focus in 1 Time Frame that you recognize or indicate those patterns.
• There is no single pattern which is a Holygrail

Vic's 1-2-3 Breakout

"Principles of Professional Speculation" written by Trader Vic, highlights another great
reversal pattern called " 1-2-3 ." This pattern is also called "Three Point Reversal" or "ABC
Reversal." Trader Vic's 1-2-3 reversal pattern is based on the Dow Jones Theory-change of
trend. Prices that are rising or falling must break a trend line. In an uptrend, prices will stop
making higher highs (for shorts) or lower lows (for longs) in a downtrend. During the uptrend,
prices try to reach the recent high, but may fail to hold and close above the high. During the
downtrend, prices may try to reach the recent low and may fail to close below the low. This
provides a potential signal.

The criteria for a 1-2-3 pattern taken from Trader Vic's Book is as follows:
1. A trend line "breakout" or "breakdown" from the current trend.
2. A "test" and "failure" of the previous "high" or "low" after the trend line breakout or
breakdown.
3. The breakout or breakdown of a "swing high or "swing low" prior to the rule 2.

Trade: After a trend line breakout or breakdown and re-test of "swing lowlswing high," a sell
signal is generated in uptrend when prices close below the "swing low". In downtrends, a buy
signal is generated when prices close above "swing high."
Target: The target is placed at the "swing low" prior to the "new high in 1-2-3 "bearish
setup" and "swing high" prior to the "new low" in 1-2-3 "bullish setup."
Stop: Place a "stop" order above the "swing high" in 1-2-3 "bearish setup" (Short) and below
the "swing low' in a 1-2-3 "bullish setup" for long trades.

UJ longterm and Envelope 20

It seems there had been connections betweetn UJ Monthly with sma 20 or i prefer use envelope 20 (0.618)

Vic’s 2B Top/Bottom

Chart Patterns Notes

• Patterns indicate the psychology and behaviour of a market whether its trending,consolidating or reversing. Various technical patterns mostly occurred far more frequently than they would have done if they were truly random events. In general,the charts contained useful information about future prices.
• Chart Patterns are Predictive.
• However, identifying Chart Patterns that “work” 100% of the time is difficult (or impossible).
• Rules are needed to assess and trade the opportunities.
• Patterns are morely Art than A Science. The traditional patterns used in technical analysis were, of necessity, fairly crude, determined by what was readily visible to the eye. As a result, technical analysis has always been more of an art than a science.”
• Ambiguity in Chart Pattern Recognition is universal!
• Breaks creates Panic
• Consolidations are the most powerful pattern.Each consolidation will typically imply a move of equal distance from the last significant low or high
• Dont try to create patterns. Wait until clearly formed.
• Better Risk/ Reward can be obtained by trading the Breakout only. Assess the Target and
  initial Stop values. Trade those patterns with a Reward:RiskRatio of at least 2:1and preferably 3:1.
• Failure Patterns gives more breakout that succesful ones. Consolidations usually break in the direction of prior trend but can also reverse in the opposite direction.Such “failed” consolidations can prove highly profitable
• Only trade those Patterns which have a clear size reference in the timeframe. Stay Focus in 1 Time Frame that you recognize or indicate those patterns.
• There is no single pattern which is a Holygrail

Pivot Candle

What is pivot candle ?
Pivot candle is candle that creates new trend. its not highest or lowest, could be the same but as we know that trends started after consolidations so how or when it starts is more important than the turning points.

Requirements:
a. in 1H charts, we only look for trend/wave that creates adequate range (around or more than daily range), draw horizontal lines at opening price first bull candle (pivot candle) for every wave which adequate range.
b. in 4H, same as 1H but use adequate weekly range.
c, in D1, same as 1H but use adequate monthly range.

why opening price ? once again how or when it started that matters.
when they create trend,they will try to defend or they get losses.

Opening Price

Opening price is important level in determination breakout

whether they are opening weekly, opening daily, and or monthly.
Please draw High and Low at first H1 candle of the day,of the week, of the month.
what you see ?