How To identify the Jesse Livermore Buy Pattern

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As traders, we're always on the lookout for reliable patterns that can give us an edge in the market. One such pattern, popularized by the legendary trader Jesse Livermore, is the Accumulation Cylinder with Widening Mouth.

This pattern is a rare but potentially explosive formation that can signal a significant price move.



What is the Accumulation Cylinder with Widening Mouth?

The Accumulation Cylinder with Widening Mouth is a technical analysis pattern where the price of an asset moves back and forth between two non-parallel lines, creating a cylinder-like shape.

Over time, the "mouth" of the cylinder widens as the price continues to fluctuate within the pattern. This pattern is often seen during periods of consolidation, where the market is accumulating before a potential breakout.

Key Characteristics

Non-Parallel Lines: The price moves between two trendlines that are not parallel.

Widening Mouth: The distance between the trendlines increases over time.

Consolidation: The pattern typically forms during a period of consolidation, where the price is ranging within a defined area.

Volume: You must see that the volume size is as pictured in the schema.

This post is real evidence that such a pattern does exist.
In addition, you can see that the consolidation period takes time to develop...
No need to rush...

Also, if you have not got on it from the start, by looking at the past, you can estimate that the runup is just starting, so you can still get some of the cream.

The Plus and Minus are showing increasing volume vs decreasing volume.

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Note

Here is it again in SMCI

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Note

This is how it looked like in the LOG scale,
so you will know what to expect.