Trade rules by Jack Schwager


58. The breakdown of the trading range, followed by a return to the deep range (for example, three-quarters or more within the range) - another significant form of a bull or a bear trap.

59. If the apparent V-trough should Consolidation nearby formation, it can serve as an additional confirmation of the basin. However, if this consolidation then breaks down, and the prices are close to the minimum V-depression, you should wait to re falling trend and reach new lows. In the latter case, one could take a short position in the use of protective suspensions near the top of the consolidation. Similar comments would be suitable to the case of V-tops, followed by consolidation information.

60. V-tops and V-depression followed many months of consolidation, which begin to form immediately after the pivot, often long-term highs or lows.

61. Narrow consolidation in the form of flags and pennants are often reliable figures continue and let you log in with an existing trend close enough location breakpoints.

62. If a narrow consolidation in the form of a flag or pennant leads to a breakdown in the wrong direction (for a reversal instead of continuing), the expected continuation of the movement in the direction of the breakdown.

63. "Curved" consolidation often lead to an accelerated move towards the bend.

64. Break of the short "curved" consolidation in the opposite direction to bend, it is often a good sign of a trend reversal.

65. Wide-range days (the days trading range is considerably wider than the average range of previous days), closing in the opposite direction to the main trend, often give reliable early signal of a trend reversal, particularly if they also include the reversal signal (for example, filling the gap acceleration, breakdown pre consolidation).

66. Almost vertically significant price movement over a period of 2-4 days (with breakdown of relative maxima and minima) tends to continue in the coming weeks.

67. Spikes are good signals short-term reversals. Extremum spike can be used as a stopping point.

68. If there are spikes analyze chart twice with the tongue and without. For example, if you ignore the obvious spike flag, the breakdown of the flag - a significant signal.

69. Filling the gap acceleration can be seen as evidence of a possible trend reversal.

70. Island reversal, soon followed by a return to recently trading range or shape of consolidation, is a signal of a possible long-term achievement of the maximum (minimum).

71. The market's ability to stay relatively stable, when other related markets under considerable pressure, can be seen as a sign of inner strength. Similarly, the weakness of the market at a time when the related markets are strong, can be regarded as a bearish sign.

72. If for most of the day trading session, prices constantly rising, the Order to close in the same direction.

73. Two consecutive flag with a small gap between them can be seen as a continuation.

74. Consider a rounded cavity, followed by consolidation with a slight bend in the same direction near the top of the figure, as a bullish building (a cup with a handle). A similar observation can be applied to the top of the market.