Chapter 3 Definitions, Structures, & Examples
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Nirvana Systems Inc.
3-7
Profiting with Chart Patterns
Sometimes you will get stopped out just early of a big move as seen in September
2015 this will happen sometimes. You will rarely get the whole move. You will see
that
generally, the Eighths tool really does keep you in the trades for the longest
possible time.
Trend Line Break & Reversal
Pattern number two is equally powerful. In fact, you could just trade this one pattern
and make money every day in the market—especially in Real Time. It is the Trend
Line Break and Reversal pattern. The breaks are more powerful than the reversals. I
believe all of our examples are going to only talk about breaks.
Figure 3-6.
Trend Line Break
and Reversal Pattern
The concept is the same. A trend line is essentially a sloping support or resistance line.
If it is below the chart and the chart is rising, it acts as a support line. If it is above the
chart and the chart is falling, it acts as a resistance line. The support trend line is called
a lower trend line and resistance is an upper trend line. Bounces are very tradeable but
the most tradeable patterns are the breaks because they are the most easily visible in
the chart. If you break to the downside, just like with a support level, you can have a
panic sell off follow the break.
