Looking for the Swing Pattern Finder for NT8?
NT8 Version
Different Classes of Formations
Before getting into how to use the Swing Pattern Finder (“H” on The Swing Toolkit toolbar), it’s important to understand how the formations are shaped and how we classify them into two main classes of formations. For a list and overview of the formations, please visit chapter 2 of our Learning Guide. Once you understand what you are looking for, however, the UppDnn tools takes the details of the actual Fibonacci levels and makes them incredibly fast and simple to analyze!
The Swing Pattern Finder (“H”) puts the formations into two main classes, one where point C exceeds point A and one where it does not. We’ll call this “Class 1“.
To illustrate, here is a picture of a pattern. Note the position of C in relation to the A to B leg (inside the range from point A to point B). Again, think of this as “Class 1“.
What we call “Class 2” formations are ones where point C goes beyond point A (either higher or lower, depending on the direction of the formation). “Class 2” formations, such as the Cypher. Below is an example of a Cypher (also known as the “Royal Canadian”). Note the location of C in relation to the A to B leg.
The reason we put the formations into two classes, is you use the tool in two distinct ways depending on the class of formation. These methods are outlined below.
How to Use the Swing Pattern Finder
(“Class 1” formations)
Step 1: Look for ABC
After a significant high or low is put in, visually look for the ABC portion of the formations.
Bearish example: In this example, there is a low (point A) and a higher low (point C). This creates the ABC portion of a potential formation (noted by the blue lines). Keeping this A, B, C move in mind, continue to step 2.
Step 2: Analyze the Formation
If this market continues to rally from point C, where may it terminate and start going down? Using the tool, drag from the low at point C to the left of point A (as illustrated by the red arrow in the chart below). Knowing where you expect points A, B, and C to fall (from step 1, above), it’s important to drag X to the left of point A to make sure the tool correctly identifies points A, B, and C. Also, it’s important to note that if point C is a “low”, then point X will be a “high” point above point B (and vice versa). Continue to step 3 for a screenshot of the tool finding these swings.
Step 3: Choose Point X
Below is the tool in action. After you click on point C, drag to where you want point “X” to be (see section on “Finding X” for detailed examples). In this example, using the price that the “Suggested X” gives (indicated by the little blue arrow (blue line added for explanation purposes). In the screenshot, the gray line between C and X is the line you actually draw, the tool will add the connecting lines, the labels, and the target area for D. This example finds a pattern and outputs the target area for D with a rectangle and a dotted line within the rectangle. The price of this dotted line is what you want to pay the most attention to! As you can see, there was a lot of resistance at this area (indicated by the dark blue arrows).
They’re Everywhere!
Once you get good at seeing this initial “ABC” formation, you still start seeing them everywhere! The chart below is the same chart as above, but looking at the minor swings. There are more, but for sake of clutter and readability, only three are drawn.
Bullish Example
A high is put in, then a lower high is put in (noted by the blue lines). Where may this fall reverse?
Drawing from “point C” to point X, we see a “suggested X” price (noted by the little, blue arrow (blue line added for explanation purposes)). Using this price as X (making sure X is to the left of A), we get a target area with two overlapping formations. Paying the most attention to these horizontal, dotted lines in the rectangle, this gave a great entry area for the long. (In this example, the two dotted lines are only 8 pips apart.)
On the same chart, another long presented itself earlier (chart below). They’re everywhere!
Using the Swing Pattern Finder
(“Class 2” – Cypher, for example)
Step 1: Look for ABC
After a significant high or low is put in, visually look for the ABC portion of the formation. In this case, we look for a lower high leading into a new high.
Step 2: Analyze the Formation
Analyzing this class of formation is slightly different than the “class 1” formations. Instead of drawing the tool from point C and going left, you go from point A and go right (as indicated by the red arrow on the chart below). Make sure you drag to the right of “C” to allow the tool to correctly identify the A,B,C points. Also, it’s important to note that if point A is a “high” point, then point X will be a “low” point below point B (and vice versa). See step 3 for a screenshot of the tool finding these swings.
Step 3: Choose Point X
This method may seem a little awkward at first, but once you understand what it’s doing, it’s very simple. As you drag downward, point X is chosen to the left of A at the same price that you drag down to. In the screenshot, the gray line originating at point A and sloping down to the right is the line you actually draw, the tool will add the connecting lines, the labels, and the potential reversal area (point D). In this example, it found a potential Cypher and the support area this formation creates. Note, this class of formation does not have a “suggested X” feature and typically a major swing is the best choice for point X.
Another Example:
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