PROTECTED SOURCE SCRIPT
Sklarew Rule of 7 (with alternative multipliers)
Sklarew’s Rule of 7 – A Framework for Projecting Price Movements:
The Rule of 7 is a price projection method developed by Arthur Sklarew, a technical analyst and trader. It is designed to estimate how far a breakout move may extend after price breaks out from a key level.
How the Rule of 7 Works
The method assumes that price moves in measured expansions, using a base move (initial breakout movement) as a reference point. These expansions follow a set of specific multipliers applied to the base move.
Step-by-Step Calculation
1. Identify the Initial Breakout Move
This is the first leg of the trend after a breakout from consolidation.
It can be measured from a swing low to swing high in an uptrend or vice versa in a downtrend.
2. Project Future Price Targets Using Multipliers
Sklarew’s Rule uses four price expansion levels:
1.75 × Initial Move
2.33 × Initial Move
3.50 × Initial Move
7.00 × Initial Move
These levels act as potential profit-taking zones or trend exhaustion points.
Example Calculation
Let’s assume WTI crude oil breaks out from $75 to $80, making a $5 breakout move.
Applying Sklarew’s Multipliers
Target 1: $80 + (1.75 × $5) = $88.75
Target 2: $80 + (2.33 × $5) = $91.65
Target 3: $80 + (3.50 × $5) = $97.50
Target 4: $80 + (7.00 × $5) = $115.00
These price levels provide guidance on where price may extend to and where traders might scale out of positions.
Alternative Multipliers: 1.40, 1.75, 2.33, and 3.50
Some traders modify the original multipliers for different market conditions. Using your alternative set, the projections would be:
Target 1: $80 + (1.40 × $5) = $87.00
Target 2: $80 + (1.75 × $5) = $88.75
Target 3: $80 + (2.33 × $5) = $91.65
Target 4: $80 + (3.50 × $5) = $97.50
This adjusts for different volatility environments while keeping the core principle intact.
How Sklarew’s Rule is Used in Trading
Trend Following: Confirms momentum strength & helps identify targets.
Breakout Trading: Estimates how far a breakout may run before retracing.
Institutional Strategy Influence: Market makers may structure orders around similar measured moves.
The Rule of 7 is a price projection method developed by Arthur Sklarew, a technical analyst and trader. It is designed to estimate how far a breakout move may extend after price breaks out from a key level.
How the Rule of 7 Works
The method assumes that price moves in measured expansions, using a base move (initial breakout movement) as a reference point. These expansions follow a set of specific multipliers applied to the base move.
Step-by-Step Calculation
1. Identify the Initial Breakout Move
This is the first leg of the trend after a breakout from consolidation.
It can be measured from a swing low to swing high in an uptrend or vice versa in a downtrend.
2. Project Future Price Targets Using Multipliers
Sklarew’s Rule uses four price expansion levels:
1.75 × Initial Move
2.33 × Initial Move
3.50 × Initial Move
7.00 × Initial Move
These levels act as potential profit-taking zones or trend exhaustion points.
Example Calculation
Let’s assume WTI crude oil breaks out from $75 to $80, making a $5 breakout move.
Applying Sklarew’s Multipliers
Target 1: $80 + (1.75 × $5) = $88.75
Target 2: $80 + (2.33 × $5) = $91.65
Target 3: $80 + (3.50 × $5) = $97.50
Target 4: $80 + (7.00 × $5) = $115.00
These price levels provide guidance on where price may extend to and where traders might scale out of positions.
Alternative Multipliers: 1.40, 1.75, 2.33, and 3.50
Some traders modify the original multipliers for different market conditions. Using your alternative set, the projections would be:
Target 1: $80 + (1.40 × $5) = $87.00
Target 2: $80 + (1.75 × $5) = $88.75
Target 3: $80 + (2.33 × $5) = $91.65
Target 4: $80 + (3.50 × $5) = $97.50
This adjusts for different volatility environments while keeping the core principle intact.
How Sklarew’s Rule is Used in Trading
Trend Following: Confirms momentum strength & helps identify targets.
Breakout Trading: Estimates how far a breakout may run before retracing.
Institutional Strategy Influence: Market makers may structure orders around similar measured moves.
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Script protegido
This script is published as closed-source. However, you can use it freely and without any limitations – learn more here.
Aviso legal
As informações e publicações não devem ser e não constituem conselhos ou recomendações financeiras, de investimento, de negociação ou de qualquer outro tipo, fornecidas ou endossadas pela TradingView. Leia mais em Termos de uso.