Chart patterns provide an opportunity for early entry. However remember all setup can fail. Be ready to cut lost when the trade turns against you. So, you have to trade with eyes open; trade what you see and not what you think.
Picture worth a thousand words, see China Shanghai Stock Exchange Composite Index for illustration.
Bull Market Bear Market
Many neglected to realize and confused success with a bull market and was unprepared when the bear market (yet to confirm) finally came. The bear market will be confirmed when price action continue to form the lower high. Will see
Gartley 222 Pattern
Larry Pesavento shared a pattern what he called “Gartley 222” pattern. He called this pattern as such because it was described on page 222 of the book Profits in the Stock Market written by H.M. Gartley back in 1935. This pattern is now used by many traders and was single handily popularized by Larry. Amazing!
Gartley Reversal Pattern, a study of top and bottom, such an opportunity does not arise everyday. But, but when it does it is a worthwhile waiting.
How to Trade?
- Patience to wait for the market formation to develop.
- Courage to put the order in and a protective stop to minimize risk.
China Stock Market Shanghai Stock Exchange Composite Index, 000001.SS
See our China SSE Composite Index chart posted earlier. The correction is a retracement of 61.8% at this point. What could you benefit from this retracement? Of course, there are risk, there are many many risk. There are so many intervention to prevent this correction by many, such as the authority.
However, technical analysis trade what the learning of TA. When you decide the swing low and swing high, the rest it just let the trade happen.
We must understand, in order for the price action to move up, it has to come down first (correction).
September 10, 2015 China Shanghai Stock Exchange Composite Index
Look closely, you can easily spot the Gartley 222 Sell Pattern
Gartley 222 Sell Chart Pattern
September 10, 2015 China SSE Composite Index
Look Back
In fact way back in August, our analysis has shared our view on where the China market index may move. See below.
Or more, from the link, Update Shanghai Stock Exchange Composite Index | 000001.SS | Moses’ China Stock Column
August 4, 2015 China Stock Market, Shanghai Stock Exchange Composite Index
Moses
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