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Indians Three Little Indians is how this pattern was dubbed by Linda Bradford Raschke when she introduced this pattern in her book on trading called "Street Smarts." The basic idea is that the 3rd peak or trough will be equidistant in price and or time. My all time favorite occurred in the S&P500 back on February 27 2000. In that particular example, that same pattern was repeating on a minuette scale that confirmed the price target of the large scale Indian pattern. Who knew the index would blow up over 18% over the next month! Almost always, some minuette pattern will show up to confirm a larger degree pattern is completing (and without any confirming minuette dynamics, trend continuation is the expected rule of thumb). |
