📈 How to exploit the "W" model to capture trend reversal?
This model indicates the beginning of a strong upward movement! Here are the steps to benefit from it:
🔍 Model characteristics:
- Two similar bottoms (W): separated by a small peak.
- Resistance breakout (Break): the strongest signal to start the rise.
- Hammer candle: may appear at the second bottom as additional support.
🎯 Trading strategy:
1. Entry point (ENTRY):
- Enter a buy after breaking the resistance line with an increase in trading volume.
- Ensure the price stabilizes above the resistance before entering.
2. Stop loss (STOPLOSS):
- Place it below the second bottom or the lowest level in the model.
- Stick to the 10% rule (do not risk more than 10% of your capital).
3. Target (TARGET):
- Set the target at 100% of the model's height (the distance between the bottom and resistance).
- You can use the 50% level as a profit-taking area.
💡 Golden tip:
The model is stronger when it appears after a clear downward trend accompanied by high trading volume at the breakout!
🚨 Warning:
The model reflects the strength of buyers after two failed tests for a drop, but it needs a confirmation of the breakout and a logical target.
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