This pattern is regarded as a high probability set up; there is one way to increase the probability even higher. Divergence is a great tool to see the dying momentum in the 2B pattern. The price will make new low or high to form a 2B pattern as we can see from the definition. In a successful breakout, momentum should shift to higher level but 2B is an unsuccessful breakout or you can say fake out, so failing momentum will be an early sign for us to not enter the breakout. We will now wait for the signal candle to enter the trade with confidence.
Target: The target is usually set at the ‘swing low’ prior to the new high or ‘swing high’ prior to the new low.
Stop: Protect your ‘long’ trade entry by placing a ‘stop’ below the recent low and protect the ‘short’ trade entry by placing a ‘stop’ above the recent high.
5 comments:
Nice, the probability is a very good chance to have a postitive result. nice done.
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Good work man.
The divergence adds a lot of confirmation to 2B setup
There aren’t a lot of good sources like this. I can see that you are an expert in this area.
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