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Lesson 16
Posted: Thu Oct 09, 2008 8:27 am
by Trader Question
In lesson 16, video 1.15, screen 137, it says "what seems like a runaway trend".
To me, it looks like a normal trend reversal. Why do you call it a RUN AWAY trend?
HB
Re: Lesson 16
Posted: Thu Oct 09, 2008 9:29 am
by pldot
"Runaway" is a term of art, but would refer to the relatively rapid move.. at the end of the bar marked with the yellow arrow note not only the obviously sudden advance over two days but the key fact of dots opening up significantly, usually a sign of an exhaust but if at the start of a move can also point to a breakout the has some legs. The pattern of dots-opening-up followed by the next bar's nearby holding is a very powerful tool, treated at length in Lesson 23 on exhausts. Once you see those dots open up then you have to be on the alert that the "runaway trend" that most would follow may in fact be overextended, and we are on alert for exhaust or pause... i.e. the unexpected counter to the deceptive trendstar.