Sunday, October 25, 2009
Trading Strategy - Using Fibonacci on a Head and Shoulders
When the necklie is broken, wait for a retracment (draw the fib line from the top of the second shoulder to the bottom and wait for the ambush zone). Many traders put a stop loss a little above neckline and the m arket often goes up to take out those traders and push the price temporarily higher.
Chart Patterns - Head and Shoulders
For confirmation, look for a close beneath the neckline as well as increased volume on the day it closes beaneath neckline.
Head and Shoulders
Head and shoulders is a reversal pattern that, when formed, signals the security is likely to move against the previous trend. There are two versions of the head-and-shoulders pattern. The head-and-shoulders top is a signal that a security's price is set to fall, once the pattern is complete, and is usually formed at the peak of an upward trend. The second version, the head-and-shoulders bottom (also known as inverse head and shoulders), signals that a security's price is set to rise and usually forms during a downward trend.
Also check others in their sector. Is their sector showing weakness or strength? Weakness could help confirm the down movement.
Head and Shoulders
Head and shoulders is a reversal pattern that, when formed, signals the security is likely to move against the previous trend. There are two versions of the head-and-shoulders pattern. The head-and-shoulders top is a signal that a security's price is set to fall, once the pattern is complete, and is usually formed at the peak of an upward trend. The second version, the head-and-shoulders bottom (also known as inverse head and shoulders), signals that a security's price is set to rise and usually forms during a downward trend.
Sunday, October 18, 2009
Trading Strategy - 30 Minute Gap Up
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