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Hi walterw,
Can you elaborate on that a little bit more? Here's my example of what I was talking about using patterns with price action:
Like I said before, patterns need to be confirmed by price action, in this case, lower higher and that turned the support area into resistance area (this is what I call confirmation of a breakout). My stop would have been the last higher low pivot (just below 796), and entry just below the confirmation area, then target is around 791. The R:R is not even 2:1 so I'd either take a small position or find a bigger pattern in higher timeframe that might be at play to find a bigger target to confirm the direction and possibly lower target. In this rectangle target, the target is near the low of the day, which is quite a safe exit. |
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Torero,
Perfect example of the stage 3 top.
The best part is it is shortable the first time back to it no matter when that happens. I am shorting those patterns in @NQ and @ES from 2002.