Strictly Buy and Sell Set Ups Message Board

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Strategies & Market Trends : Strictly Buy and Sell Set Ups

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From: chowder	12/29/2006 8:54:28 PM
	of 13449

Re: Bearish wide range bars ..... Just as bullish wide range bars usually indicate institutional buying, bearish wide range bars usually indicate institutional selling. ECA is a good example of this. Back around December 17, price gapped down at the open and formed a high volume bearish wide range bar. The novice trader would buy this drop guessing that it was a climatic sell off. The professional trader would wait. The professional trader doesn't buy a bearish wide range bar. The professional trader would wait to see if a narrow range bar would follow and then come up with a strategy off of that. ECA followed up with another bearish wide range bar with even more selling volume. This set up a 2 day reversal that some of us played and had success with. If you recall, I said to be out of the trade after 2 days. The chart comfirms why. Price has continued lower and looks like it wants to continue lower. It's important to look for low risk, high probability entries. Buying a high volume bearish wide range bar is high risk, low probability entry and the market has provided countless examples of this.

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