Study Guide for Technical Analysis Explained Fifth Edition, 5th Edition

10

ONE- AND TWO-BAR PRICE PATTERNS

Questions

Subjects to Be Covered

Preconditions for one- and two-bar price patterns

Differentiating between the various patterns

How they should be interpreted

1. True or false: To qualify as an outside bar, it must contain all of the following elements:

  i. It should be preceded by a strong price trend.

 ii. It should totally encompass the previous bar’s trading range.

iii. It should gap up or down on the previous bar.

A. True

B. False

2. Which of the following is not true?

A. One- and two-bar patterns have only short-term significance.

B. They must be preceded by a strong price trend.

C. When all of the characteristics are present, they can always be relied upon to signal strong trend reversals.

D. One- and ...