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Here's the biggest prime example I just witness
That's a 2min graph. TR has been going on for more than 10 minutes when suddenly massive bull bars and then follow up bear bars.
Luckily for me I was just watching and did not get caught up on the wrong end of it. Imagine the poor folks bought at the top of that last bull bar.
An horizontal bull flag many times become the final flag and the consecutive bull bars that followed became for sure a buy climax so this was a reversal setup!
Wow, I did not know that. What do you mean by consecutive bull flags? I thought it was just TR and then breakout. Would you have shorted below that last bull bar or wait for then follow up big red bar?
Would it have been possible 5o ride the climax up and then short it down?
Ludopuig is right.
It might be a final bull flag (not consecutive bull flags) but you also have to see the whole picture to figure out if it is the final flag. TR late in the bull trend often is the final flag which breakout might fail.
If the context is right, you could short below the second bear bar closing near its low, which is the second entry, and below EMA. It has higher probability.
If I might not be right, Ludopuig could comment.
Cheers,
Wei
I thought it was just TR and then breakout.
The sideways move was less than 20 bars so still was a PB, not a TR. Depending on the context, which we don't see, it could be a FF or not.
Would you have shorted below that last bull bar or wait for then follow up big red bar?
Like Wei said, sell below bear bars because you don't know when the bull climax will end or if it will have a second leg up before going down.
Would it have been possible to ride the climax up and then short it down?
Oh yeah! But if one day you become that good you will be almost a trading god 🙂 For the time being, better to focus in taking and managing correctly either the long or the short, not both!
