2B pattern spring
2B pattern also known as "spring," he recalls little on the chart the letter M or W, and gives a signal of possible turn upward or downward price trend as soon as the market price no longer form new, much higher highs or lows.
first 2B pattern (excellent and very strong reversal trading technique) has been described in the book of Victor Sperandeo (among traders, he was then known as Trader Vic) «Speculating professionally." Trader Vic described this excellent technique as follows: "With the upward price trend, if the market price has touched the previous price peak, but could not cross it the first time, and immediately fell below the previous price peak, it is said, that the trend the market is about to make U-turn ». The opposite is usually true for the downward price trend.
pattern 2B rules apply as soon as the market price creates a new maximum or minimum, and then significant pullback. Following the implementation of the rollback, the price is once again trying to test the generated maximum or minimum price. Once this testing of "new" maximum or minimum is unsuccessful, it is a potential reversal signal prior price trend. This setup is powerful enough and signaled the beginning of a trader in the market correction.
2B patterns can be found on the intraday setups, and for transactions within the day by finding trendy tops and bottoms is quite useful. Forex traders can also be used in the analysis of 2 tops and 2 bottoms volume of transactions. If this volume is on the second day of peak, or less than the first peak or the bottom, it tells him about the divergence and the formation of the possible formation 2B .
rules for the formation of peaks 2B.
market at the moment is in the upward price trend and creates a new maximum (maximum of 20 bars), after which there is a rollback on the market (visible on the chart), which consists of 5-8 bars . After rolling back on the market, the price is trying to break this new high and closed over it . That's just the bar and called «break-bar» . But the closure over the top, "the breakdown bar" does not occur, because the price closes below the minimum "breakdown bar." That way, the forming of a pattern on top of 2B. Stop-loss is on the recent price peak oscillating . Profit target is the vibrational minimum , which was preceded by a new high.
rules for forming bottoms 2B.
price in the market forms a new price low (at least 20 bars). After the formation of a new price low, there is a pullback in the market, consisting of 5-8 bars. After that, the price shall attempt to return to the previous trend, resulting in the closure of the bar below the new minimum. Here's this bar called « break-bar ». But the subsequent continuation of the price trend in the market is not observed. Very soon price closes above the maximum price «breakdown bar." As a result, the pattern is formed 2B. Trading position purchase opens above the high of a price bar , which closed above the high of "the breakdown bar." Stop-loss should be placed under the last swing low . Desired profit target is the vibrational peak price, which preceded the New minimum price.
Terms of the deal for the purchase of 2B.
1. The formation of a new low.
2. There is a price pullback.
3. Shaped bar, which closed below the low of price bar one.
4. Note the high of bar 3. We look forward to closing the bar above 4.
5. Open a bargain to buy a maximum of 4.
6. Profit target (take-profit) - the old oscillating price maximum.
2B - conditions on the deal on the sale.
1. The formation of a new high.
2. There is a price pullback.
3. Shaped bar, which closed above the high-end bar 1.
4. Note the minimum bar 3. We look forward to closing the bar at 4.
5. Open the bargain on sale for a minimum of four.
6. Profit target (take-profit) - the old oscillating price minimum.
Series 2B Patterns on the intraday chart:
The first example - a price pattern 2B for the deal to sell . Short trading position is opened at the closing of the bar (3). Targets for profit - swing low, which preceded the bar 1. Stop-loss is above the high bar 2.
second example - a price 2B pattern for the deal to buy . Long bargain opens above the high bar 2. Targets for profit is above the swing high, formed up to the bar 1. Safety stop-loss order is placed under the "swing low", which was preceded by a bar 3.