Wednesday, April 29, 2009
The ABC pattern by Moise Levi
I often refer to the ABC pattern on this blog.
I like simple things ; they make sense.
Complex systems = confused messages to my brain = failure in trading !
What is the ABC pattern ?
High impact news tend to create a gap and huge volume
This pattern combines News & Price action.
Price will rise (or fall if its a bad news) fast sending us to "A"
Then comes the pull back (retracement), price finds a support (until more good news show up, then price will break out above that recent high.
In the case of a hard fall, price will first find "A" ; retrace up to "B" , then price will fall again on more bad news and go below "A" ; causing our main short signal "C"
Traders/ Investors should buy (or short) at "C"
Why ? Call this pattern a safe entry level
If you have any question regarding this simple pattern ; email me here