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Beat the Street: A Trader's Guide to Consistently Scoring in the Markets by Adrian Manz

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Chapter 7. Expansion-of-Range Reversals

MAKE-OR-BREAK SET-UPS don’t come along that often, and when they do, they are rarely worth the effort involved in finding them. The expansion-of-range reversal is an exception to the rule. This one takes days to form, and many potential set-ups never trigger. When an expansion-of-range reversal does trigger an entry, it can make for a profitable intraday or swing trade with a good risk/reward ratio. The pattern relies on market participants to push a trending stock rapidly higher and then sell it off for profits. Then, when all the gains of the upward thrust seem to be in danger of turning into losses, the strong money enters the market and drives the stock higher again. When the move plays out, we hold ...

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