Actually it is really nothing new. A double toppish kind of pattern, combined with an trendline break. His main accomplishment I think is his definition of drawing a trendline; from the top of my head: for an uptrend, draw a line from the lowest low to the last low preceding the highest high (!) without the trendline going trough any of the prices in between. After the trendline breaks half the time the price tries to penetrate the previous high and then fails (Vics 1,2,3, also Turtle-soup kind of thing imo). If it failes even before penetrating completely you have kind of a Joe Ross/Ken Roberts/? 1,2,3 reversal. But basically all these patterns come down to a double top kind of thing. Sometimes it penetrates the previous top a little, some time it failes exactly at the previous top, and sometimes a litte before. Even Livermore watched a stocks behavior at a previous high/low. The key is to get in early enough but not jump in before a signal. IF you get in at a reversal (entry) AND stay in LONG ENOUGH you can make lots of money on being less then 50% right. But do not get in too early. You should at least see some kind of consolidation pattern before even considering a counter trend trade. This is just my interpretation of that chapter of Vic's first book javascript:smilie('') BTW It was one of the first trading books I ever bought javascript:smilie(':eek:')
Vic defines change of trend with three conditions being met. 1. Break of trend line. 2. Test of high in up trend or low in down trend. 3. Break of reaction low in prior up trend, or break of reaction high in prior down trend. When these three conditions are met, a change of trend has occurred. It's as easy as "1-2-3". Banker
Probably a good time to take profits on VLO. Displayed interesting relative weakness over the last few days and put in a low of 36.37 today. The selloff today was further evidence of a change in trend, but the stock can also pullback here. Mav.
That what's is new: defining OPERATIONALLY what a trend is. Others just use fuzzy terms or descriptions so that in practice you don't know how to draw a (good or pertinent) trendline . Defining something NEEDS A PRACTICAL PROTOCOL. It is the same for other concept like Randomness for example and that's what Shewart DID remark about his fellows statisticians that do not work in industry like him : they just stay in abstraction and never define by a PHYSICAL OPERATION what randomness is. He innovated by saying that there must be such a definition for practice if not so a concept is useless. So that you can remember the process for going from abstraction to realisation is called Reification. For example you are a reification process of God if one believe in God of course .