Wammies and Moolahs
It's like déjà-vu, all over again.
The market moves up, the market moves down. If you are a naked trader, you will probably note that the turning points in the market coincide with the support and resistance zones. These turning points are rarely sharp and quick and are, instead, often rather slow to unfold. (There are obvious exceptions such as big shadows, covered in Chapter 6, kangaroo tails, which are examined in Chapter 8, and big belts explained in Chapter 9.) The market usually prefers to hit a zone several times before moving away from that zone. Wammies and moolahs take advantage of this tendency in the markets.
There are five steps to understanding wammies and moolahs. Each of these steps is covered in this chapter. By the end of the chapter you will understand the theory behind these two trading set-ups, and you will know precisely how to trade them.
First, the basic double-bottom and basic double-top formations are defined. Second, you will learn the critical characteristics unique to wammies, which are a special case of the double-bottom formation. Third, you will learn all about the moolah, a special case of the double-top formation. Fourth, you will see market examples of both wammies and moolahs so you may clearly understand the idiosyncrasies unique to these formations. Fifth, you will see what an optimal wammie or moolah trade looks like. By the end of this chapter, you will have a clear understanding of both trade set-ups, ...