"Parabolic arc" is a reversal pattern and has a very predictable outcome. Although they are
predictable, they are relatively difficult to trade since the market sentiment is bullish and may
be relatively tough to point reversals to trade. Most "Parabolic arc" patterns have a significant
correction of 62% from the top.
Trade: After a parabolic base, prices move up vertically and eventually the acceleration comes
to a stop and then reverses. Prices start showing lower-lows and may attempt to regain the top
again. Enter a "short" trade at the second failed attempt to test the peak or at the trend line
breakdown connecting the major swing lows.
Target : Measure the distance of the rise from base to the top. Most parabolic arc result in 62% retracement.
Stop: Protect the trade by placing few ticks above the high point of the Parabolic Arc.
predictable, they are relatively difficult to trade since the market sentiment is bullish and may
be relatively tough to point reversals to trade. Most "Parabolic arc" patterns have a significant
correction of 62% from the top.
Trade: After a parabolic base, prices move up vertically and eventually the acceleration comes
to a stop and then reverses. Prices start showing lower-lows and may attempt to regain the top
again. Enter a "short" trade at the second failed attempt to test the peak or at the trend line
breakdown connecting the major swing lows.
Target : Measure the distance of the rise from base to the top. Most parabolic arc result in 62% retracement.
Stop: Protect the trade by placing few ticks above the high point of the Parabolic Arc.
Comment:
Same pattern also can be use in down trend...