tailieunhanh - Forex Strategies for High and Low Volatility Markets_4

Tham khảo tài liệu 'forex strategies for high and low volatility markets_4', tài chính - ngân hàng, đầu tư chứng khoán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | MASTERING THE CURRENCY MARKET sell-offs or price breaks. It is this dynamic occurrence or behavioral change that experienced traders can see. This often is referred to as feeling a market as in that last leg up didn t feel right to me. Even without seeing the volume histogram at the bottom of the chart experienced traders notice when a market is starting to waver at minor resistance levels or drops faster than it had been dropping on reactions. Head and shoulders formations are great times to notice these subtle changes in price behavior because like triple tops and triple bottoms they take time to play out giving us time to observe and understand the changing dynamics. Figure 6-16 Head and Shoulders Top 148 CHART PATTERNS Figure 6-16 shows a head and shoulders top in the . stock market that played out in 2007 and 2008. We can see from the volume pattern on the chart how trader participation dried up for the last leg up to create the head and then picked up as the market sold off in November. By the time price penetrated the neckline there was little doubt about who was in control of this market from the price action and volume the bears. After a climactic sell-off in January the market snapped back and retested the original breakout area. Rising and Falling Wedges A rising wedge is a bearish formation that usually is seen as a reversal pattern but also can be a continuation pattern. Here we will focus on reversal patterns. A rising wedge can be seen on the charts as an up move with a wide shape that gradually narrows as it rises giving it a cone shape. It can be tricky to identify as being bearish because it exhibits the higher lows and higher highs that are the hallmark of an uptrend. What helps us identify it as a reversal formation is the decreasing volume on each successive rally. Regardless of whether we see it as a bearish development by following basic trendline analysis we will be able to see when the formation breaks out or down by the way it .