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(创建页面,内容为“== Four trades off nine transitions == The market could be moving in only three directions at any time: '''up, down or flat'''. From there, it could transition to any other or have a continuation in the existing direction. '''Therefore there are nine possible transitions''' the price could take. An up to up after a failed down or horizontal move is a trend continuation, an up to down is a trend reversal, the flat to up is a breakout and so on. There is a ki…”) |
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'''This means there are only four kinds of trades: Reversals, continuations, breakouts and failed breakouts.''' If you can master detecting and trading these transitions, you are already on your way to success. | '''This means there are only four kinds of trades: Reversals, continuations, breakouts and failed breakouts.''' If you can master detecting and trading these transitions, you are already on your way to success. | ||
'''Continuations:''' Most trending days have two or more continuations. Most continuations are A2, which is a 2 legged pullback to the ema. The simplest way to look at an A2 is the second attempt to end the pullback. As long as any of the bars that make up the pullback are near the ema giving an entry slightly above or below it, you can consider it an A2. Another way to define this is two failed attempts to reverse the trend, i.e. failed L2. Note that if your A2 entry is very far from the ema, you may get a 3rd push which turns into a W pullback to the ema. These should be taken just like they were an A2. In a strong trend, you may have H1s and L1s that work, but new traders should just stick to A2. | ==== '''Continuations:''' ==== | ||
Most trending days have two or more continuations. Most continuations are A2, which is a 2 legged pullback to the ema. The simplest way to look at an A2 is the second attempt to end the pullback. As long as any of the bars that make up the pullback are near the ema giving an entry slightly above or below it, you can consider it an A2. Another way to define this is two failed attempts to reverse the trend, i.e. failed L2. Note that if your A2 entry is very far from the ema, you may get a 3rd push which turns into a W pullback to the ema. These should be taken just like they were an A2. In a strong trend, you may have H1s and L1s that work, but new traders should just stick to A2. | |||
'''Reversals:''' Obvious reversals are rarer on a given day, but the Wedge reversal is likely to be the most successful. The most important requirement of a Wedge reversal is an obvious overshoot (more than 2t) and especially a second overshoot. It takes some experience to correctly read a good Wedge reversal, but t'''he following signs increase the probability of a W reversal:''' | ==== '''Reversals:''' ==== | ||
Obvious reversals are rarer on a given day, but the Wedge reversal is likely to be the most successful. The most important requirement of a Wedge reversal is an obvious overshoot (more than 2t) and especially a second overshoot. It takes some experience to correctly read a good Wedge reversal, but t'''he following signs increase the probability of a W reversal:''' | |||
'''1. A second overshoot''' | '''1. A second overshoot''' | ||
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The above signs of weakness may imply trend termination into trading range or a pullback and resumption. | The above signs of weakness may imply trend termination into trading range or a pullback and resumption. | ||
Breakouts and failed Breakouts: Breakouts from a trading range are complex and are the hardest to read correctly, especially because most breakouts fail. However, '''there are certain signs of impending breakouts:''' | ==== '''Breakouts and failed Breakouts:''' ==== | ||
Breakouts from a trading range are complex and are the hardest to read correctly, especially because most breakouts fail. However, '''there are certain signs of impending breakouts:''' | |||
'''1. A double bottom pullback at the bottom of the range generally means the market may breakout at the top of the range. Similarly a DP at the top implies market will breakout at the bottom.''' | '''1. A double bottom pullback at the bottom of the range generally means the market may breakout at the top of the range. Similarly a DP at the top implies market will breakout at the bottom.''' |