Thursday, March 22, 2012
The first opposing trend bar in a channel
The reason it works is because this is essentially a first channel breakout that you expect to fail. Note that you need a trend bar with a strong close. A doji such as b57 or a weak close such as b11 is usually not reliable. Often this is just an optimization since you get a signal right after (b16, b30, b61) and you can simply choose to trade it with a normal stop entry.