![]() Combining the critical aspects from the first two articles, here we will review a foundational aspect which can potentially turn your trading “right side up” – the reversal bar! The second article emphasized how tick charts may assist in spotting momentum changes, or reversals. Finally, all trade decisions must be performed at bar close. ![]() A bar closing on its high or low shows a greater probability of continuing in that direction, at least for a little bit. Bar closes absolutely matter, and some price patterns could influence directional probabilities. In the first article, we explored price action momentum and how we can review these aspects through historical chart review. Ī reversal bar is one of the most reliable signal bars, and it simply is a bar that reverses some aspect of the direction of the prior bar or bars. I’m sure that some will find this statement shocking or difficult to believe, but it is true. Enjoy!įor those who have learned how to be consistent, the money is not only within their grasp they can virtually take it at will. I’m too humble to ever say something like that, but there are times I have wanted to. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.This is another guest post by Big Swiss! I would have to say I totally agree with the first quote below. ![]() For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. ![]() One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. Hypothetical performance results have many inherent limitations, some of which are described below. ![]()
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January 2023
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