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Broadening Formations, Right-Angled and Ascending: Trading Tips
Measure rule: Compute the height from the highest peak (point A in the Measure Rule figure to the right) to the horizontal trendline (B) and multiply it by the above 'percentage meeting price target.' Add the result to the highest peak (A, upward breakouts) or subtract it from the horizontal trendline (B, downward breakouts) to get the price target (C).
Intraformation trade: Buy at the horizontal trendline when price starts rising and sell or sell short once price turns at the top trendline.
Buy at 3rd touch: When price touches the horizontal trendline for the third time and begins rising, buy.
Partial rise: A partial rise works 61% of the time.
Partial decline: A partial decline works 80% of the time.
Price trend: The best performing patterns are those with a short-term (less than three months) rise leading to the pattern.
Yearly high, low: Downward and upward breakouts perform best when the breakout is within a third of the yearly low.
Volume trend: A downward volume trend results in the best postbreakout performance.
Throwbacks and pullbacks: Throwbacks and pullbacks hurt postbreakout performance.
Height, width: Tall patterns perform better than short ones. Wide patterns (both breakout directions) perform well.
Broadening Formations, Right-Angled and Ascending: Trading Tips
Measure rule: Compute the height from the highest peak (point A in the Measure Rule figure to the right) to the horizontal trendline (B) and multiply it by the above 'percentage meeting price target.' Add the result to the highest peak (A, upward breakouts) or subtract it from the horizontal trendline (B, downward breakouts) to get the price target (C).
Intraformation trade: Buy at the horizontal trendline when price starts rising and sell or sell short once price turns at the top trendline.
Buy at 3rd touch: When price touches the horizontal trendline for the third time and begins rising, buy.
Partial rise: A partial rise works 61% of the time.
Partial decline: A partial decline works 80% of the time.
Price trend: The best performing patterns are those with a short-term (less than three months) rise leading to the pattern.
Yearly high, low: Downward and upward breakouts perform best when the breakout is within a third of the yearly low.
Volume trend: A downward volume trend results in the best postbreakout performance.
Throwbacks and pullbacks: Throwbacks and pullbacks hurt postbreakout performance.
Height, width: Tall patterns perform better than short ones. Wide patterns (both breakout directions) perform well.