Bjorgum Double Tap

This trading strategy identifies patterns that resemble a double top or double bottom and enters trades when a reversal is indicated, looking for a stop or take profit at calculated levels using Fibonacci projections.

To trade this strategy manually on TradingView:

• Configure Indicator: Use the built-in Pivot Point High Low indicator with a length corresponding to the 'len' variable in the script to identify potential tops and bottoms.
• Entry Condition: Enter a long position when a double bottom pattern forms, signaled by two lows at approximately the same price level with a higher low in between. Conversely, enter a short position on a double top with two high points and a lower high in between.
• Exit Condition: Use Fibonacci extension levels to place a take profit order, as represented by the 'fib' variable in the script. Stop loss orders are calculated based on the 'stopPer' variable, which represents a Fibonacci retracement from the pivot high or low. For trailing stops, use an ATR trailing stop with parameters specified by 'atrLength', 'atrMult', and 'lookback'.

Improving the Bjorgum Double Tap strategy for manual trading involves refining entry and exit criteria, incorporating additional technical analysis for confirmation, and strengthening risk management. Here's an actionable plan:

• Refine Pattern Recognition: Enhance the detection of Double Top and Bottom patterns by combining the pivot points with volume analysis. High trading volumes on the second peak or trough lend credibility to the reversal signal. Manually annotate charts to spot divergences in volume and price, adding a layer of confirmation to the pattern recognition.
• Optimize Entries: Instead of immediately entering on pattern breakout, seek additional candlestick confirmation, such as a strong engulfing or closing outside the pattern on significant volume. Patience can prevent false breakouts and improve the success rate of entries.
• Dynamic Stop Losses: Establish stop-loss orders by using more than the invalidation point of the pattern. Implement a dynamic model taking into account recent volatility and the Average True Range (ATR) to adjust the stop-loss level appropriately, reducing the risk of being stopped out prematurely in more volatile markets.
• Multi-tier Take Profits: Instead of setting one take-profit level, employ a multi-tier exit strategy. Take partial profits at different Fibonacci levels to lock in gains and let the rest of the position run towards more ambitious targets. This method capitalizes on varying market momentum levels and can maximize profitability.
• Incorporate Trend Analysis: Before taking a position, assess the overall trend direction using moving averages or trendlines. Aligning your trades with the broader market trend increases the probability of holding a profitable position.
• Market Sentiment: Supplement technical analysis with an understanding of market sentiment. Pay attention to significant news events or economic releases that could trigger volatility and impact the pattern's reliability. Adjust your strategy in anticipation of these periods or choose to stay out of the market to avoid erratic behavior.
• Routine Review: Keep a trading journal detailing the trades taken with this strategy. Regularly review to identify consistent issues, such as particular times of day with high failure rates or certain pairs that underperform. Refine your trading plan based on these insights.

The Bjorgum Double Tap strategy is tailored for traders who are:

• Adept at recognizing and interpreting chart patterns, particularly Double Tops and Bottoms.
• Looking for a systematic approach to entering and exiting trades with clear pattern-based signals.
• Interested in strategies that use historical performance data to inform future trades, but also understand the need for adaptability due to market randomness.

This strategy fits a technical trading style that emphasizes:

• Pattern Trading: Trading on recognizable and time-tested reversal patterns, applying a methodological approach to capitalize on perceived market cycles.
• Precision and Discipline: Utilizing strict entry, exit, and stop loss rules derived from mathematical calculations and pattern dimensions.
• Proactive Risk Management: Incorporating ATR-based trailing stops and using backtesting as a part of the trader's toolkit to maximize gains and minimize losses.

• How it works: The strategy identifies "M" and "W" shaped Double Top and Bottom patterns to signal potential reversals for entry.
• Usage flexibility: Suitable for automation with live trade alerts, manual trading refinement, or a hybrid approach incorporating both.
• Entry signals: Entry points are determined based on the breakout of the patterns, with specific conditions for tops and bottoms.
• Exit strategies: Takes profit based on a predefined target using the pattern’s height through Fibonacci measurements and incorporates trailing stops calibrated with the ATR for dynamic exits.
• To enhance it: Combine pattern breakout points with candlestick confirmation and volume analysis to improve accuracy and reduce false signals.
• Risk management: Employs stop-loss orders at strategic points beyond pattern highs or lows, with the option for ATR-based trailing stops to adjust to market volatility.
• Trend confirmation: Prior to commitment, validate each trade setup with the overall market trend for increased reliability.
• Trader fit: Best suited for technical traders focused on disciplined pattern trading and risk control, willing to conduct regular strategy reviews for optimization.