This chapter takes a brief tour through several chart patterns, looking for sell signals. With each one, we apply the measure rule to predict how far price will tumble, look for underlying support, and determine if the move is worth avoiding.
Suppose that you own the stock shown in Exhibit 24.1. Should you sell at D?
The decision to sell or hold is important because you face it on every trade. Let us read this chart to see how we can decide.
An ascending triangle appears in red. When price closes below the up-sloping trendline, it is a sell signal. If we are a day trader or swing trader, ...