Trading Scallops Ascending Pattern

Trading Ascending Scallops Pattern

The example above illustrates an "Ascending Scallop" pattern from Amazon's daily chart. Amazon formed its first ascending "Scallop" from $36 to $42. A retracement is needed for this pattern to trade another upside "Scallop" pattern. After a steep decline, Amazon formed a round bottom at $37 to $39. Once the pattern started to breakout of the round bottom, it gave an opportunity to enter a "long" trade.

1. Enter a "long" trade above the right side hump at level A ($39).

2. Place a "stop" order below the low of the second "Scallop" bottom ($37).

3. Targets are placed at the height of the first "Scallop" from level B ($42).

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