trading tutorial helps trading in the commodity market and stock market

Entries and Exits - continued

Entering a trade on a weak down bar over a mid point pattern

Mid points are one of the most important indicators available of the future trend. When a stock drops and starts to rally, two possibiliteis are possible. It will resume its drop and move even lower than it did before, or it will rise past the high of the previous drop. If the price rises above the mid point is it very likely to move even higher; if it stops below the mid point and reverses, it is likely to move much lower.

Bar 'A'

This is a very weak down bar following another down bar that penetrated the mid point but recovered later in the session. Bar 'A' is weak because it has a very small range and very light volume; in addition it closed above the day's low showing the presense of demand.

Bar 'B':

If you sold here you would have resulted in a 29.7% gain.

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