There are several characteristics or important things that can be taken into account in determining whether the price movement has enough strength to move long, including:
a. Reversal signal is quite significant. This can be trusted when it occurs after a strong trend.
Strong trend = Strong Signal Reversal
Vice versa, if the previous trend is weak, a reversal which happens also to be weak. Movements like this are usually characterized by a sharp movement with a less powerful foundation. Examples of falling prices move premature:
Determine whether prices will experience a reversal in the example above is not easy. A trader must have good reason to decide that the price will experience a reversal.
Trends Strong = Strong fractions Forwarding
What we notice in this movement is the formation of the pattern, is it really have a strong foundation for continued price movement. Examples of graphs which is engaged in a strong up trend seen in the image below:
c. Pressured. Conditions where the price was under pressure both from above and pressure from below, at the right moment. This suggests that prices will move further
Because there are fundamental (news) is strong that awaited by the market. Under these conditions, the price usually moves with a narrow range, indicating that the news was announced is really taken into account. This general which often happens in such movements is the existence of false signals.
d. contanst movement. Movement like this is because the market has strong expectations for the issue or information that is on the market so slowly but surely moving away price.
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