Technical analysis is pretty good at identifying trend reversals at a relatively early stage and allowing you to ride that trend. That should be good enough for most of us, but many traders would also like to consistently predict the duration and magnitude of the next trend. That’s not possible, of course, but there are some instances where specific setups or characteristics are often followed by above-average price moves. Read on to learn more about Pinocchio bars and how they may indicate when traders might get caught leaning the wrong way.
Day trading involves buying and selling a stock, ETF or other financial instrument within the same day and closing the position before the end of the trading day.
These patterns take an extra day to form, but they spot turning points more accurately than standard reversal-day definitions.
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