Kiss of Death | #AUDUSD #AUD #USD #Forex #technicalanalysis
Friends,
Here is one pattern worth adding in your armamentarium, called the "Kiss of Death, or "KoD" for short.
KISS OF DEATH ANATOMY:
First let's define a few things. The KoD is a counter-trend pattern. Meaning that as price moves in one direction, a set of condition comes into alignment to contradict this on-going trend, and instead would allow the trader to take a position in anticipation of an opposite trend.
The KoD is composed of two parabolas. A parabola has a flat base and an apex. In the case of a Kiss of Death, you end up with two parabolas, the first parabola having a smaller apex than the second one, but both maintaining their bases aligned. In effect, the base of each parabola would define a double bottom, and put side to side, both parabolas end up defining a triple bottom.
In the case of a bearish KoD - as is the case in this chart - the bases define a triple top in line with the based of the first parabola. Now, don't be such a stickler that you are looking for a perfect level. Here, I have defined 0.88995 as a probable level of reversal (if price does submit to the pattern and other geometric influences, such as the overhead trend line), but a brisk price could very well generate a bearish pinbar whose wick will surpass that level, but still decline as anticipated. So, look for a candle that closes below that trendline for instance, or whatever price action or indicator you may have become comfortable to define your tolerance level when an adverse excursion in price occurs.
In the case of a bullish KoD, simply turn the pattern upside down, and define an entry that is coherent with the base alignment, but also cognizant of the structural environment. For instance, here look for structures define on the over side of the prior impulse, as it would often define a level at which price might encounter resistance, a phenomenon we have defined as "Transmural", as a structure-low (as in this case) on one side of an impulse leg will define a support level, and as the impulse leg breaks through it and rallied back up, that prior support level will act as a resistance. Even though these events occur before and after a seemingly unrelated impulse leg, that impulse instead becomes the wall, or "mural" where the prior support will project into a resistance - Resistance here helped define the base of the smaller parabola ... kapish?
TRENDLINE:
Here, there is not much to say about the trendline. In our studies, we have defined segments of significant and less significant rallies defined as nodes and nodules, respectively, which we use as hidden geometries in some of our predictive analysis and forecasting. Outside of that, there are no other ornamental words for the trendline except that in its most simplistic existence, it maintains perhaps the most reliable effect in defining price reversal levels. Here, the trendline comes ever so close to the large green candle, so as of this writing, we are still expecting a slight increase in price before witnessing a sine quo non validation of that trendline's underbelly.
PREDICTIVE ANALYSIS:
Our predictive analysis comes into alignment with the KoD pattern, as well as the trendline expectation point, from which a decline might occur. The analysis has also defined a probable primary target level at TG-1 = 0.85109.
OVERALL:
We are bringing together three separate analytical tools of varying degree of difficulty, which may or may not correctly define a point of reversal. However, taken on their own, these have remained good friends over the years, and a technical reunion could potential call for a pip celebration - Time only will deliver the pips or the lesson.
Cheers,
David Alcindor
---------------------------------
Disclaimer: All of our analyses are for educational purpose only. The forecasts, analyses and opinions generated herein are not trading recommendations.
Here is one pattern worth adding in your armamentarium, called the "Kiss of Death, or "KoD" for short.
KISS OF DEATH ANATOMY:
First let's define a few things. The KoD is a counter-trend pattern. Meaning that as price moves in one direction, a set of condition comes into alignment to contradict this on-going trend, and instead would allow the trader to take a position in anticipation of an opposite trend.
The KoD is composed of two parabolas. A parabola has a flat base and an apex. In the case of a Kiss of Death, you end up with two parabolas, the first parabola having a smaller apex than the second one, but both maintaining their bases aligned. In effect, the base of each parabola would define a double bottom, and put side to side, both parabolas end up defining a triple bottom.
In the case of a bearish KoD - as is the case in this chart - the bases define a triple top in line with the based of the first parabola. Now, don't be such a stickler that you are looking for a perfect level. Here, I have defined 0.88995 as a probable level of reversal (if price does submit to the pattern and other geometric influences, such as the overhead trend line), but a brisk price could very well generate a bearish pinbar whose wick will surpass that level, but still decline as anticipated. So, look for a candle that closes below that trendline for instance, or whatever price action or indicator you may have become comfortable to define your tolerance level when an adverse excursion in price occurs.
In the case of a bullish KoD, simply turn the pattern upside down, and define an entry that is coherent with the base alignment, but also cognizant of the structural environment. For instance, here look for structures define on the over side of the prior impulse, as it would often define a level at which price might encounter resistance, a phenomenon we have defined as "Transmural", as a structure-low (as in this case) on one side of an impulse leg will define a support level, and as the impulse leg breaks through it and rallied back up, that prior support level will act as a resistance. Even though these events occur before and after a seemingly unrelated impulse leg, that impulse instead becomes the wall, or "mural" where the prior support will project into a resistance - Resistance here helped define the base of the smaller parabola ... kapish?
TRENDLINE:
Here, there is not much to say about the trendline. In our studies, we have defined segments of significant and less significant rallies defined as nodes and nodules, respectively, which we use as hidden geometries in some of our predictive analysis and forecasting. Outside of that, there are no other ornamental words for the trendline except that in its most simplistic existence, it maintains perhaps the most reliable effect in defining price reversal levels. Here, the trendline comes ever so close to the large green candle, so as of this writing, we are still expecting a slight increase in price before witnessing a sine quo non validation of that trendline's underbelly.
PREDICTIVE ANALYSIS:
Our predictive analysis comes into alignment with the KoD pattern, as well as the trendline expectation point, from which a decline might occur. The analysis has also defined a probable primary target level at TG-1 = 0.85109.
OVERALL:
We are bringing together three separate analytical tools of varying degree of difficulty, which may or may not correctly define a point of reversal. However, taken on their own, these have remained good friends over the years, and a technical reunion could potential call for a pip celebration - Time only will deliver the pips or the lesson.
Cheers,
David Alcindor
---------------------------------
Disclaimer: All of our analyses are for educational purpose only. The forecasts, analyses and opinions generated herein are not trading recommendations.
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