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Headfake

LTC/USD Potential BB Head FakeLTC/USD was getting Bollinger Band squeezed by the consolidation of price between the .5 Fib retracement area and the .236 retracement area following the sharp drop in markets in mid May. Now we see that the price has tried to break downward out of the squeeze, implying what seems to be a bearish bias only to bounce up off the .236 area and enter back into the Bands. We could be witnessing a head fake, one of John Bollinger's favorite indicators with the Bands, leading to a sharp upwards movement. Firstly, we need to be sure the 200 SMA (purple line) isn't now being flipped from support to resistance, potentially rejecting price around $145 indicating we should head further down. If it does turn to resistance and adds conviction to the bearish bias, that's a big indication that it would be most advantageous to stay away from long positions. We will see within a week or two if this head fake does in fact play out and we get a nice walk up the bands with targets at: $174.81 (.382 Fib line, middle of range) and $221.85 (.5 Fib line, top of range) Another thing to keep in mind is that we could just keep squeezing for months after this head fake occurs before making any truly definitive movements. It will be fun to watch one way or another.
COINBASE:LTCUSD
by Hrempe
Bitcoin Weekly Bollinger Band Head Fake Bull Reversal SetupHey guys, This is a quick update in regards to the latest Bitcoin price action following my earlier Weekly update. For those who have not subscribe yet to my chain simply hit that Like and Follow buttons to receive the latest notifications/updates. Last week in an earlier update, I warned that closing below the 1W midband at 48.4K would send us much deeper to two important buy levels: 34-35Ks 31-29K or the Weekly bottom band These two levels were just hit in the past 6 hours from which Bitcoin bounced hard from to 41-42Ks! Now that we tagged the buy/long 31-29K bottom of the Weekly Bollinger Band, there is a possibility of seeing a large scale bull reversal through what John Bollinger calls a Bollinger Head Fake. What's a Bollinger Head Fake? A Bollinger Head Fake is a rapid reversal in price direction that most often occurs after a Squeeze, usually on high volume and at a Bollinger Band. As of now the Weekly Bands have started to squeeze and the bottom band has been tagged. The expectations in the next few weeks is to see a fast reversal of the price action back above the 1W midband at 48.8-49K towards either 55K or 63-64K (ATH) preferably before the Monthly candle closes on May 31st as shown using the 2017 blue fractal. Once fulfilled then I believe we can see Bitcoin grind up towards the ATH by August and have a last bull run towards 250K+ by Dec 2021 NOTE: Should the Bollinger Head fake fail to reverse the trend in the next 2 weeks and the Weekly Bollinger Bands Squeeze resolves to the downside with a sell off below 28K (or below the bottom bollinger band), then I expect a much longer Bear Market at hand which would test the previous top as support at 20Ks. Happy trading! Carl M.
BITSTAMP:BTCUSDLong
by BitcoinGuru
8
HOW TO AVOID A BREAKOUT HEAD-FAKEAVOIDING FALSE BREAKOUTS 1. Declining Volume and ATR/Volatility. 2. Candle Close Outside the Consolidation 3. Significant Volume on the Breakout. 4. If You Get Head-Faked, Close the Trade. How to Avoid False Breakouts Prevent a Head Fake You can't avoid every false breakout. There is no magic formula. There is no way to know what the market is about to do. What we do as traders is take advantage of little patterns and clues that the market is going to possibly do a certain thing. This is all based on probabilities. These patterns and clues never worked out 100% of the time. That is why we manage our risk on every single trade because there are no sure things. There are things you can do to increase the probability that you are not going to get tricked by a false breakout. Lets take a look at them. AVOIDING FALSE BREAKOUTS 1. Declining Volume and ATR/Volatility. Watch for declining volume & atr/volatility on the consolidation before the breakout. This shows that there are fewer traders willing to risk money that price is staying in the consolidation. 2. Candle Close Outside the Consolidation. Candle closes, especially daily & weekly, are very important events. Day traders like to square their positions at the end of the day. A bearish day trader who is done for the day will close his open shorts which is a buy causing the price to pop up. If price has pushed below the consolidation during the coarse of the day, price will often retreat back into consolidation after day traders square their positions. A daily close below the consolidation means longer term traders are selling. Reverse is true for bullish breakouts. 3. Significant Volume on the Breakout. You want to see significant volume on breakout candle close outside of consolidation. If the volume is declining during the coarse of the consolidation and a volume spike on the candle close outside of the consolidation supports the fact that more traders are interested in the move. Look for the spike to be 100% of the average volume to enter a full sized position. You can enter a ½ sized position if there is at least 75% of the average volume. Use a 20 period simple moving average on the volume so it represents about a month of volume data on most markets. 4. If You Get Head-Faked, Close the Trade. You will eventually get caught in one. If you get a candle close back inside the consolidation, close the trade. You may have another opportunity to get back into the trade from a real breakout. Don't immediately give up on it. Especially if you see the volume and atr/volatility continue to decline. Taking a small loss early on will help you make it up on the real breakout.
Education
by Tradingstrategyguides
Looking for signal to short this bloody equity rally?I have a solution. Use the moving average 50 period low. Check the 4h chart on US30. Insert a 50 period moving average low. Insert support and resistance lines. You will notice a couple of things, at the end of the last equity rally, it was profitable to short the market EVERY TIME once the price CLOSED below the 50MA. In other words you couldn't go wrong using this signal. In the current rally, the MA50 has acted as a support EVERY TIME (along with upward trend). A close below this line will be a good time to sell based in historical patterns. A close below the upward trending black support as well will confirm selling signal. We are approaching historical resistance and I'm expecting the price to fall below the MA50 soon - probably this week. The rally has taken many scalps. Don't be cannon fodder. Trade wisely. There are many fundamental reasons why this rally should end, I feel that this rally is purely technical.
FX:US30Short
by maccabean
2
HBI 4 for 1 stock splitHBI recently underwent a 4 for 1 stock split which now makes it a very reasonably priced stock to consider trading. In the past HBI has been a little erratic (with deeper than preferred pullbacks) making it difficult to trade. But overall it has trended well, as can be seen by the unbroken weekly trend, since breaking the 2008 high in early 2013. On the daily chart the trend has not been so linear - gaps and spikes (especially around earnings announcements) have added to it's unpredictability. From October 2014 to February 2015 price also appeared to be in consolidation (which would have been around the $100 mark before the split). Since breaking the recent pivot (in mid-February) a new daily uptrend has developed and the trend has been very linear. It's early days yet and I will want to wait at least a few more weeks to see how it develops. If you like to get into trends early, however, this could be a good opportunity.
NYSE:HBILong
by iAnneTrader