Trader Tip: Dragon’s Tails As traders we are always looking for those little Trader Tips that will give us some edge on whether a trade will be good or bad (i.e. trade Filters). Remember that often it is just 5% of our trades that can cause our overall account performance to be negative or positive. In this Trader Tip we shall discuss Dragon’s Tails, a tip that might save you from a bad trade.
The theory behind this is to judge whether a break point will break or not. These break points can be whether price will break to the next level higher or lower levels or a potential trendline break. Price will challenge these points by running up to them and then fall away, creating successive reversal candelstick pattern, but not necessarily reversing the current trend. This indicates that price is resisting heavily this level and most likely will fail. Here are more detailed rules for this Trader Tip:
- 3 or more reversal candlesticks.
- At near the same resistance point.
- Increases the likelihood the point won’t get broken.
So give this Trade Tip a look, and see if you can use this in your trading and/or improve upon it.
Learn more on this, review of the news headlines, technical analysis and more on your daily YouTube Blue Point Trading Morning Call. Click here, or watch below this Trader Tip in video format.
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