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Shanghai Stock Exchange Composite Index
After the price action hit the top and fail, this gives a good opportunity to use the strategy like H M Gartley Reversal Strategy. Gartley Strategy is use to study the top or bottom after the price action has trend for a while. See chart for more, picture worth a thousand words. Added the Fibonacci level, you can see better. Add the River, it provides a great visual effect, you can see the price action was bouncing on the River, River act as a support for the price action to bounced off. When the price crossed the River, you should anticipate the bearish trend.
The drop can be quite significant, as after a long trending up. So, don’t try to catch the falling knife, unless you can find a significant level to support the fall. See my next chart, I am going to show you what is the significant level mean.
July 23, 2015 Shanghai Stock Exchange Index Composite
How to Catch a Falling Knife – SSE Composite Index
In trading, you will realise that a significant level is always tested a few times. And when it is a significant level, the price action will respect it. So, a resistance may turn support. See the fallow chart for what I mean. Have fun!
July 23, 2015 Shanghai Stock Exchange Composite Index
Thanks for visiting the website.
Moses
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