Below is a slider quiz to test your ability to identify high and tight flags and trade them. Let's call them HTFs for simplicity. Captions appear below the pictures in red for guidance, so be sure to scroll down far enough to read them.
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The high and tight flag: It used to be the number 1 performing char pattern, but not anymore. I think the other patterns were jealous. HTFs are ranked 38 now, where 1 is the best
performing. Anyway, look for price to nearly double in 2 months or less. That becomes the flagpole (the vertical red line at A). Then a flag appears. This is not a
flag like we saw in last week's quiz. Rather, it's a sideways move of a few days to several weeks. I show the flag outlined in green at B. Price breaks out
upward at C and then stalls, but eventually makes its way up to D before crashing. If you don't wait for price to top the flag/flagpole, you'll be making a costly mistake. Why? Because
this chart pattern fails more often than it works and when it works, you'll likely see price climb 10% to 15% and then die.
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Where's the high and tight flag? (Look for price to double in <= 2 months). For help, click here.
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I didn't intend that last slide to be a part of the quiz but... Anyway, the flagpole is A. B is the flag. Price rises to C, about 10%, and then drops to D. If you didn't sell
in a timely manner, you'd have lost almost half your investment.
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Here's another HTF. The price doubles or nearly so and it takes much less than 2 months to do it. Price has broken out upward at A. Do you trade this one and if so,
how far do you expect price to rise? (Guess).
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Point A is the same price bar as in the last slide. Price started moving lower right from the start, hitting a low at B. It recovered to hit a new high in August but eventually
dropped all the way down to 46 cents (not shown). Ouch.