1.3 - Advanced Trend Analysis & reveral patterns

The trend is your friend

• A trend will persist until its reversal is indicated
• Understanding the trend helps traders avoid unnecessary speculation and align their trades with the dominant market direction
• A trend stays in motion until external factors cause a shift, such as news, economic data, or exhaustion in buying or selling pressure

The three reversal patterns are

• Failure swing
• Double top/bottom
• Non-Failure swing

 

Failure swing	Double top/bottom	Non-Failure swing
Failure swings are the least reliable as it may just be an ABC correction Sell signal is break of the HL (box)	Fails to break the previous peak, making a LL The first sell signal is the break of the previous HL Second sell signal is a break of the LL (box) Double top confirmation is when price breaks the LL	More conclusive sell signal at the pentitration of the lower support Confirmatioin of the reversal happens when the price breaks below the LL (box)

• A breach of the prior support signals a potential change of the trend & represents a technical sell signal