above 50 bucks it might be a buy.1% 1 box chart showing that there is a trendline and res area at $50.if 50 holds on a retrace from above then go long
Thank you, but what about the entry rule? http://www.elitetrader.com/vb/attachment.php?s=&postid=1850304
Although I have a scanner for pnf signals, I don't use it. I like to look at individual charts and anticipate the move. An example is the hewlett packard chart. I don't want to wait for a scanner to let me know that HP already created my pattern, I want to have an order in with my broker at the exact price the pattern is created.
In that example you have a failed double bottom buy well within a well defined uptrend. If you were NOT already in the uptrend trade, then yes of course take the trade because it is a good signal. What I am talking about is when a NEW MAJOR trend is potentially beginning. That false double bottom is a pullback from the trend. It is nowhere near the real upward trend line. You don't know for sure if you are going to have a new trend until the old one is officially history.
I'm really confused by your question so I may not be answering it properly. If we are in an uptrend I am only looking for longs and vice versa. Since that chart was in an uptrend and I did get a failed double bottom sell, I would have taken it even though I did not have the second level uptrend yet. All failed double bottoms cannot have a level two uptrend by their very nature.
You have answered my question. I like your failed double top/bottom setups. They sure are YOURS. I named them HG Bull/Bear trap! A traditional or classic Bull/Bear trap is basically a failed triple top/bottom break, yours is a double. It happens more often, is good for intraday trading, although degree of confirmation requirement maybe higher than a classic one, imo.
The false double bottom sell and false double top buy signals are just an anomally that seems to work. Day in, day out trading requires a system of high probablity. The higher probablity pnf signals come from level two trends.