Friday, February 24, 2012

Geometry in the Markets

I am a very keen user of  both geometrical and time patterns in trading.   The chart below shows a simple AB=CD pattern.     The D completion point was on 22nd December and ideally one would like the price to be at the completion level at that time.  In this instance it was just 7c below it.   That was enough to attract my interest.     If you follow the dotted line across from the D point you can see that the price reacted at the level on 4th January and again on the 10th January before finally collapsing.   This gave added confidence to trade a reversal funnel.   the price fell 15% in 6 days.



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