I'd like to propose a few changes in nomenclature as depicted below, for the author's consideration: Target 1 -> crouched dragon Target 2 -> postured dragon Target 3 -> flame-puking dragon Also it is absolutely essential to stress the importance of focusing on the potential reward of the strategy, rather than any risks, IMO Thank you in advance for your consideration (quote converted to Jive-speak for my better understanding) http://funtranslations.com/jive
At this forum we have a very in-depth TA discussion about this pattern by Pekelo about the pattern itself @ http://www.elitetrader.com/et/index.php?threads/dragon-pattern.154290/ along with other free online resources from different perspectives but just as informative (use Google). I'm a big fan of TA but as a TA trader (I use it with other stuff)...I don't advise using any form of TA unless you know its origins and purpose of use by the designer. For example, what do you know about this Dragon pattern ? Did you know the designer used it as a trade management after he researched Forex trading instruments via fundamental/Economic event reasons...that market context info that most TA traders ignore but should not ignore !! My point, its very common to see someone design something a very long time ago in completely different market conditions and use it successfully only in specific trading conditions to only see others come along years later and use it in different situations...passing it on to others as such without any information about its origins and purpose. This is a common flaw and problem with TA. Simply, this pattern is now being used not as intended and only a few will be lucky enough to use it as intended for specific market conditions involving fundamentals/Economic reasons. Don't use TA alone especially if the specific TA was not designed as such. P.S. I can't remember the forum (maybe T2W) but someone listed +50 different types of double bottom/double top patterns...dragon pattern was one of them. May be worth your while to look for the other types if you like double bottom/double tops. Regardless, no matter what we call it (e.g. sushi mama)...most patterns are the same or occurring inside of another pattern. A reality reason why backtest results are different. Yeah, the dragon pattern is coded by a few although each have a different perspective of it (use Google).