The Lil Rizzy uses Fibonacci retracements to measure the distance between a recent high and trend line, then projects that same distance upward to forecast the next price move. The hosts argue the pattern's strength often justifies holding the entire move rather than scaling out early.
Why is this pattern so simple and so powerful? What it really is, it's based on Fibonacci and all the retracements. This would be a little rizzy, I would consider, on going on an uptrend. What I would do here is measure the distance from here to here, and this would tell me, hey, this thing went down, then we got a little bounce, it pulled back a little bit, and the height it's going to go on the next move is from the high to the point on the trend line. And that's where you're going to find the next move goes to.
Is there a case, let's say if that was larger and it's showing you that it'll probably get up here, when it comes to say managing your trade, would you say, okay, once we're starting to reach the upper band, that's where I'll start to scale out? Or—
no, if the Lil Rizzy, right, had the distance, let's say the high was here and let's say the trend line was here, and let's say it brought us the next move, I would play the whole move even if it brought me out of reality, because they're that powerful that they usually tend to finish. And again, they're really just based on Fibonacci retracement.
