Trading Round Bottom Pattern

Trading Round Bottom Pattern

The example above illustrates a "Round bottom" pattern formation from the eSpeed (ESPD) weekly stock. ESPD traded in a narrow channel (from $7.50 to $10.25) range from January 2005 to April 2007. A horizontal trend line is drawn connecting the highs of the "Round bottom". The depth of the "Round bottom" pattern is about $2.50. In April 2007, ESPD traded outside the channel and closed above recent "swing high" signaling a potential "long" trade.

1. Enter a "long" trade above the high of the "swing high" at $10.75.

2. Place a "stop" order below the recent "swing low" at $8.00.

3. Set "targets" at patterns' depth above the breakout level. Secondary targets may be set at previous major swing high levels.

11.8. V-Top Pattern

Fantastic Futures

Fantastic Futures

Get All The Support And Guidance You Need To Be A Success At Futures Trading!This Book Is One Of The Most Valuable Resources In The World When It Comes To Futures Trading For The Common Guy.

Get My Free Ebook


Post a comment