There is an old rule in trading that is tried and true – “Never short the first top”. The principle applies equally to stocks that have fallen significantly, and can be considered as “Never buy the first bottom”. Today we will look at the analysis for tops, but it is equally applicable to bottoms – just turn everything upside down.
One of the most widely recognised patterns in technical analysis is the bearish ‘head -and-shoulders’ pattern. As the pattern is a reversal pattern, the first requirement of the formation is that a valid uptrend is in place. This pattern tells us that, initially, the market was moving in the usual way during an uptrend with higher
This week’s focus is on the use of ‘bullish confirming price bars’ to give traders reliable signals to buy into up-trending stocks or indices. While there are a plethora of ‘bullish key reversal bars patterns’ with various uses and definitions, here we focus primarily a favourite price bar reversal signal – the ‘Pinocchio Nose Candle.’ Some argue that a simple
The market’s sharp pullback in September left many traders burnt as they tried to latch onto the momentum too late, with the ASX 200 rebounding last month in equally dramatic fashion. This lesson may help those who wonder whether it’s worth trying to catch such a ‘runaway train. Slope-a-dope So how steep is steep? If