Thursday, February 16, 2012
When reversal bars don't trigger - II
One of the surest signs of a strong trend is that reversal signals will have no takers. This is because traders find the bear close to be a buying opportunity and in most cases, you should cancel an order if it does not trigger from the signal bar.
For example b36,37 was a possible sell signal after 3 pushes up, However, since it did not trigger, you should consider going long instead. This would allow you to buy above b41, a strong close after two legs down in a strong trend.
Similarly b62 was a possible 1tf after a shallow TL break making it a major reversal candidate. But since it did not trigger, you should not go short. However, due to the trend break, you should not look to go long either.
The right course of action is to wait till the range is 4 points or larger and then trade fBOs or wait for a BP or other new trend.