one pattern -two previous different outcome
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Here is the pattern :
1) PA mark a first bottom
2) reaction high - lower than previous swing high
3) rejection below first bottom (fakey ?)
4) second reaction high - below the first
5) third bottom - at same level as the first
6) last reaction high
So we can draw, a declining resistance -in red
An horizontal support -in blue
And a rising TL in black
In first example, PA was exiting a long downtrend
In second, PA was entering one
In the first RSI was recovering from oversold and rose near the median
In the second RSI was falling from overbought and declined near the median
For entry, using a trigger stop-limit buy near red TL breaks (or the opposite near blue TL) is one idea, but be careful of having a tight SL since PA retested the TL in both cases
A more aggressive approach is to enter long at 5) and use 2 stop loss, 50% at the black TL, 50% at the blue
Or to short at 6), but in this case placing a good SL is more difficult to find since the red TL is descending
1) PA mark a first bottom
2) reaction high - lower than previous swing high
3) rejection below first bottom (fakey ?)
4) second reaction high - below the first
5) third bottom - at same level as the first
6) last reaction high
So we can draw, a declining resistance -in red
An horizontal support -in blue
And a rising TL in black
In first example, PA was exiting a long downtrend
In second, PA was entering one
In the first RSI was recovering from oversold and rose near the median
In the second RSI was falling from overbought and declined near the median
For entry, using a trigger stop-limit buy near red TL breaks (or the opposite near blue TL) is one idea, but be careful of having a tight SL since PA retested the TL in both cases
A more aggressive approach is to enter long at 5) and use 2 stop loss, 50% at the black TL, 50% at the blue
Or to short at 6), but in this case placing a good SL is more difficult to find since the red TL is descending
Nota
based of previous performance, an estimate of both targets :Nota
And lastly, some more experimental work on time zone :From start to end of the pattern, intermediary peak at "2" and reversal at "3"
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