Faulty Patterns That Become Constructive Bases

The failed breakout can be extremely frustrating for all investors. Even though you have run your screens and the fundamental and technical signals are strong, the stock still manages to shake you out. You’re not alone. This happens to all investors. Learning from trades like this is what can separate the great investor from the average one.

After a failed breakout, it’s important to keep the stock on your radar. If you pay attention to how the stock reacts, you can find a change in character and look for constructive bases. You want to look out for tighter depths in the bases as they continue to form. Pattern Recognition in MarketSmith makes this process a lot easier, while also allowing you to continue to work on your chart reading skills.

With Pattern Recognition turned on, hover your mouse over a base to access a drop down box with key information regarding the type of pattern, stage of base, length, depth, handle percentage, and pullbacks.

If you missed this week’s webinar, or if you want more information on looking for constructive patterns, make sure you watch “Faulty Patterns That Become Constructive Bases” here.

Best returns,

The MarketSmith Team

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