What are these called?

Discussion in 'Technical Analysis' started by Rashid_G., Jun 15, 2010.

  1. These seem to be quite reliable days...

    1 Prior day must be a close at high or low, significantly pleasing one camp.

    2 Next day gap against the happy group that took home..

    3 Once price starts making new highs/lows past the open, almost guaranteed points.. These days also almost always close hard against the group that was happy the day before..

    what are they called and any known methods to trade them?
  2. gaj


    don't know a name for them, i've seen it as well.

    they work better on a setup which is already stretched a bit, and starts to break down (end of day) giving your setup - then reverses, leading to a variation of 'turtle soup' (from street smarts) or something like trader vic's 2b.
  3. Traps
  4. I plan to take advantage of them in the future. It would be nice to find out how often this doesn't work, and for that to happen there would have to be 2 very similar bars side by side.
  5. Also looks like on the prior day, price levels are broken seeming to "confirm" the case to take home in favor of the close.. everything is done to really set that group up to be trapped.
  6. 1) Make sure you look at charts that include overnight data.
    2) Some people call that a "J-hook". When flipping from a downtrend to an uptrend, it seems to trace out the letter "J" of the alphabet.
    3) The daily extreme of the set-up day becomes a location to place your stop-order for the expected continuation reversal. :cool:
  7. schizo


    Piercing Line is about the closest thing to your description but, technically, what you say doesn't make much sense because I can also point out many days where it started out like you described but ended the day on a flop.
  8. On an NDX chart please show me some failures so I am objective.. the prior bar HAS to be a 95 to 100% percent close, all but guaranteeing a continuation gap.

    In order for it to be a flop both bars would have to be similar, side by side. If there is enough reliability to 2:30pm, worth the trade and my idea is to protect the trade in the afternoon against a reversal.

    Regardless I am going to keep an eye out for it and trade it early..
  9. ===============
    Dont have enough time to comment on your MACD.

    But looks like the main moving average is close to 50 period ma;
    so its mostly a downtrend.

    Gaps tend to favor , in that case the bears;
    but if thats a 200 period moving average/support area, [looks like it is something like that], you may find that more imoportant than the ''happy group'':cool:

    Also be alert for specialty patterns/wisdom ;
    noticed for many years that BP like to gap it rather strangely....:D Think I will not mention the exact pattern.