Pattern Retest
by PRASHANT SHAH -
Price retesting of previous pivotal levels are traditionally considered as important supports and resistances and proves very effective most of the time; but trading them is quite tricky and needs confirmatory tools. Below is a quick look at the formations seen on usual charts when price retests the previous peaks or troughs. 1) Double Bottom ... Read more
Trading Column Reversal
by PRASHANT SHAH -
Although column reversal is the most basic formation of a P&F chart, using it from the trading perspective needs understanding of major P&F formations and a little practice. It can provide very affordable trading opportunity but one must know which setup should be traded. We discussed the affordability aspect while discussing the basic patterns. There ... Read more
Follow-through
by PRASHANT SHAH -
Follow-through is an important concept and I cannot stress enough about its significance. If there is strength in the move, it shall witness a follow-through. We discussed the Catapult formation which is basically a follow-through to Triple Top or Triple Bottom pattern, Double Top Buy pattern is otherwise also a bullish signal but its appearance ... Read more
Variations
by PRASHANT SHAH -
This section is relatively advanced and will take you to the next level of understanding the patterns. We have discussed the major P&F formations, which are completely objective in nature. Meaning that there cannot be an argument over their occurrence, irrespective of what happens subsequently. Words like ‘strict’ were used while explaining the column requirements ... Read more
Traps Variation
by PRASHANT SHAH -
Traps: Follow-through and Variation We discussed about Bear Trap and Bull Trap formations during last Newsletter. We discussed that: Bear Trap is a bullish pattern, Bull Trap is bearish patternBothe are objective four-column patternsBear Trap in uptrend (above moving average) is more bullish and Bull Tap in downtrend (below moving average) is more bearishBear trap ... Read more
Rising-Falling & Mini-Traps
by PRASHANT SHAH -
Mini-trap patterns: Five-Box Traps We discussed Trap formation in the section on major patterns. If weak breakout turns out to be a trap, it becomes a five-box trap. Below Image explains it. It is a five-box Trap because the number of boxes in the column preceding the breakout is less than 5. If weak breakout ... Read more
