Below is a slider quiz to test your trading ability. Captions appear below the pictures for guidance, so be sure to scroll down far enough to read them.
1 / 3
What chart patterns can you find? Look for the following: ugly looking diamond, three falling peaks (it's one pattern, not three of them), descending triangle, falling wedge, descending broadening wedge, channel.
Answers are on the next slide.
2 / 3
Unfortunately, I don't show the last 2 days on the chart. Price closes above the top of the descending triangle (far right) on volume that is slightly less than the last bar on this chart.
Question 1: Do you buy, short, or avoid trading this stock?
Question 2: If trading this one, what is the target price?
Question 3: If trading this one, what is the stop price?
The answers appear on the next slide.
3 / 3
Answer 1 (Buy?): Buy because of the upward breakout
Answer 2 (target?): Measure the height of the triangle from highest high to flat bottom trendline and project it upward from the breakout price. Price meets the prediction 64% of
the time.
Answer 3 (stop?): Stop price would be the below the bottom of the triangle. That would mean a potential loss of just over 4%.
Price broke out upward from the triangle and then quickly reversed, hitting the stop in just days.
It happens. If you didn't have a stop in place, look at your loss if you rode it all the way down!
Support this site! Clicking any of the books (below) takes you to
Amazon.com If you buy ANYTHING while there, they pay for the referral. Legal notices: "As an Amazon Associate I earn from qualifying purchases." Paid links).