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Pit Stops:
Barry Rudd's Trading Techniques |
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The following Chicago style trading technique is featured in my friend Barry Rudd's book on trading stocks. He originally developed this technique trading the futures market. This example shows a buy setup. Sell setups are the same, just inverted. |
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The trade described in Figure 13-3 is an intraday pattern of a 5-minute bar chart that is the basic ''dip and rally" setup for a buy breakout. |
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You'll often see this pattern in equities. Obviously, this is an ideal, "textbook" example. But you would be surprised at the number of times you'll find this setup unfolding in the futures that you follow throughout each trading session. |
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Know where the price support and resistance areas are on a chart. These are areas that have halted the movement of a stock or commodity in the past. The more times a particular price has stalled the stock's movement, the stronger that support or resistance area becomes. Price support lines can be drawn horizontally through lows on a bar chart where price tended to bounce up. Price resistance lines can be drawn horizontally through |
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