finally, examples

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At the end of November there was in fact a kind of pick - a not especially large but wild red bar followed by two bars describing a slanting slope. The thing about picks is, prices are declining, in the pick, and buying when prices are declining seems tricky, in my studies. Well, after those two red bars came a green bar floating above a gap, and buying the day after that would have a) apparently been possible, and, b) put us into a nice rally.

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End of September: cascading ... I'll call this pattern The Alp, because alps slope up on one side and drop off in cliffs on the other. What's not visible here is what came before September, and I bet it looks quite a bit like the action in May, with the action in June being an image of the action in September.

So, cascades are descending patterns, and I was just writing elsewhere that buying in descending patterns is problematic, and discussing the possibility of being brave, seeing a cascade, and waiting for something definitive to end it, and then buying. Well, the cascade slowed, after making a whole series of red bars, and then there was one prominent green bar, which could be called definitive looking. An order placed after that green bar day at the day's high of one of those final red bars in the cascade would quite possibly have been filled. A stop below the cascade low, at that point in place as a bottom in the chart, would have been fine, right?

What about as to selling? Well, the September top would have been a logical minimum target, for +30%, so the other question is would there have been something to justify holding when it got there? So, rallies often begin with orderly progression in steps and then end with upward acceleration. (Note that orderly progression is steps sometimes ends with a sudden decline ... it is to some extent a roll of the dice.) A look at the two year chart (meaning additional history, accessible via the y link next to the chart) shows a big top at 4.50, which would have also made sense as a target, and the rally did accelerate as it approached that price ... and did end after it reached it.