Correct penetration
- Closing above the broken point with large volume: indicates strength in the upward trend.
- Rise: After the breakout, the price rises.
- Return to the breakout point: The price often returns to the breakout point before continuing to rise.
- Stability: After returning to the broken point, the price stabilizes above it.
- Rise again: After a stabilization, the price rises again.
Correct fraction
- Close below the broken point with large volume: indicates strength in the downward trend.
- Downward trend: After the breakout, the price falls.
- Return to the broken point experience: The price often returns to the broken point experience before continuing down.
- Failure: After retesting the broken point, the price fails to return above it.
- Fall again: After the failure, the price falls again.
Technical model terms.📸⬇️
- Previous Uptrend: There must be a previous uptrend before the pattern forms.
- Butterfly pattern: The pattern must be a butterfly and not another harmonic pattern.
- ABCD pattern formation: There should be an ABCD pattern targeting a break of the neckline and a retest of the neckline.
Fibonacci ratio: The pattern often corresponds to the 38.2% Fibonacci ratio.
Long shadows in Japanese candles ⬇️
- Long shadows on both sides: Show the prevailing uncertainty and the price's inability to support the recent upward move.
- Extremely long shadows: Indicate that traders were unable to maintain the price at this bottom, and buyers dominated the market.
Divergence first positive
Positive divergence: It depends on the difference in the bottoms between the price indicator and momentum indicators such as MACD and ARS-E.
Secondly, negative divergence.
Negative divergence: It depends on the difference in peaks between the price indicator and momentum indicators such as MACD and ARS-E.
The first goal and achieving the second goal.
- Maintain support: The shape's neck support must be maintained.
- Not breaking the bottoms: The most important thing is not breaking the bottoms to achieve the second goal.