Broadening Tops trading strategy

Discussion in 'Jurnal Trading' started by frees2020, Nov 21, 2018.

  1. frees2020

    frees2020 New Member

    Broadening Tops trading strategy

    For a broadening top, the price trend should be leading up to the
    formation, not down as in its bottom counterparts. This is just an arbitrary designation
    I have chosen to distinguish the two formations.

    Shape and trend lines. Trend lines drawn across the peaks and valleys
    resemble a megaphone. Higher highs and lower lows make the formation obvious
    to those versed in spotting chart patterns. The slope of the trend lines is
    what distinguishes this formation from some others. The top trend line must
    slope up and the bottom one must slope down. When one of the two trend
    lines is horizontal or nearly so, the formation classifies as a right-angled
    ascending or descending broadening formation. When the two trend lines
    slope in the same direction, the formation is a broadening wedge.

    Touches.There should be at least two minor highs and two minor lows
    before the chart pattern becomes a broadening top. three minor
    highs touching the top trend line and four minor lows either nearing or touching
    the bottom trend line. The minor highs and minor lows need not alternate as
    prices crisscross the formation.

    Breakout. A breakout happens when prices move outside the trend-line
    boundaries or follow a trend line for an extended time. When a breakout occurs,

    I consider the actual breakout price to be the value of the highest peak in the formation.

    Measure rule. The first thing to consider about trading tactics is the
    measure rule. The measure rule predicts the price to which the stock will
    move. For many formations, one simply computes the height of the formation
    and adds the result to the breakout price. Broadening formations are not much different.

    buy trading signal Go long at the low. Since a broadening formation requires two points
    along the top trend line and two along the bottom before the formation appears,

    sell forex trading signal Go short at the high Sell short after prices start heading down at the top.

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