The Adam and Eve reversal pattern is a pattern that comes at the end of a trend to announce a high probability of a price reversal if the conditions of the pattern are completed.
The Adam and Eve reversal model is one of the most famous price reversal models. The appearance of the model indicates that the current downward trend is on its way to ending, and the emergence of a new trend indicates the inability to continue the current price trend through the inability to break the lowest price of the first bottom, and results in a decline in volume. Trading, the price consolidated and the reversal began.
The following explanation applies only to the bottom, because the same conditions apply to the top, but in reverse. The pattern consists of two bottoms, the first bottom being Adam, in a sharp shape resembling the letter V, and the second bottom, Eve, being circular, rising above the first bottom.
The target is determined by measuring the vertical distance that the price has visited between the two bottoms and the peak connecting them, and placing this distance above the breakout line. The amount of distance is considered the minimum target for the price to rise. During the formation of the second bottom, the pattern can be predicted and confirmation is only achieved by breaching the line connecting the highest point. .
Form terms
The period for forming the model should be from two to six weeks, and the period may be longer than this period, but not less than two weeks, so it is preferable to extract it at large intervals.
The round bottom should be 10% higher than the sharp bottom, the ideal percentage is 20%.
The pattern is completed after the price closes above the peak located between the Adam and Eve bottoms.
The pattern aims to stop losses below the Adam Bottom, classically identified at supports and resistances.
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