Thursday, June 28, 2012
Choosing target for W and WfBO
A wedge in general is probably the single easiest setup to swing trade. This is because you have a dependable target for a W reversal. In general, a W reversal will attempt to reverse the entire wedge move. If the Wedge reverses the move in one leg, you can expect an additional measured move in the
For example, the W35,51,61 was an extremely strong signal and should be expected to reverse the move all the way to b25 high. Therefore the high of b27 and perhaps a tick or two above are reasonable targets.
Since the move up was possibly more than one leg (two bear bars b62,69 make it a mW). The prudent thing to do is to exit. Occasionally such as today, when the move is strong enough to that the move up essentially acts like 1 leg (b62 and b69 only ticked 1t below) to continue the move up an additional size of the W.