In parts one and two (linked) we covered the basics of reversal bar patterns including hooks, pipes, and keys. In this piece we focus on the buying and selling climax. In the final installment we will focus on upthrusts and springs.
The patterns covered in this series represent an overt change in the balance of supply and demand. Importantly, very few patterns...
One of the most important chart patterns is the buying and selling climax. A classic example of the pattern, in the form of a potential selling climax (S/C) is showing up in the daily and weekly charts of ARKK. Climaxes are exhaustion patterns, they develop as the last needful seller (weak hands) capitulates and hits the bid. Sellers are essentially...
Panic selling and panic buying usually show up at the end of a move. Here I us a simple "indicator" I made to help identify if a move is particularly special.
First, I have always like ATR (Average True Range) as a useful reminder of what to expect and at one time I even used it to calculate my position size for risk purposes. I wrote two little hybrids of this...
