Bump and Run Reversal Bottoms and fx trading signals



  • Bump and Run Reversal Bottoms and fx trading signals

    Bump-and-Run Reversal Bottoms and trading signals
    The formation looks like a frying pan with the handle on the
    left sloping downward to the pan. After a deepening decline
    that takes prices into the pan base, prices level out and
    eventually soar out the right side.
    The handle forms a down-sloping trend line that approximates
    0–45 degrees (but this varies with scaling). The handle portion
    of the formation is called the lead-in as it leads in to the bump
    phase. The lead-in height measures from the trend line drawn
    across the highs to the low (not necessarily the lowest low) of
    the formation. Select the widest distance from the trend line to
    the low, measured vertically, in the first quarter of the
    formation. The duration of the lead-in should be at least a
    month, but varies depending on the situation.
    Bump phase
    The bump is analogous to the frying pan base. The downsloping
    trend line deepens to 60 degrees or more. Prices drop
    rapidly then level out and turn around, usually forming a
    rounded turn. After the turn, prices move up and sometimes
    pause at the 30-degree trend line before moving higher. The
    bump height, as measured from the trend line to the lowest
    low, should be at least twice the lead-in height. Strict
    adherence to this rule is not required, but it serves as a good
    general guideline.
    Uphill run Once prices lift out of the bump phase, they begin an uphill
    run that carries prices higher.
    Measure rule. After properly identifying a BARR bottom, you will want
    to determine how profitable is a trade likely to be. You do that using the measure
    rule. I changed the measure rule from a computation to simply the top of
    the chart pattern. The highest high is the target, and prices reach the high 64%
    to 68% of the time.
    Wait for confirmation. The confirmation point is when price closes
    above the trend line formed during the lead-in phase. Should the price close
    above the trend line, buy fx trading signals .
    Sell at old high. I have discussed how often a fx pair showing a BARR bottom
    stops near the old high (which is the start of the formation). Place a sell
    order near the price level of the old high. That will keep your profits intact
    should the pair then turn down. If you are reluctant to sell your holdings, why
    not sell half when the stock reaches the old high, then see what happens?
    Stops. As always, place a stop-loss order 0.15 below the nearest support
    zone. Move the stop upward as the forex advances. That way, when prices turn
    down, you will not lose too much. Only paying taxes is worse than riding a
    forex up and following it all the way back down.

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