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The Financial Spread Betting Handbook: The definitive guide to making money trading spread bets by Malcolm Pryor

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18. Spread Betting Strategy II – Betting On Reversals

We have completed our look at Strategy I, betting on a trend. This chapter looks at another strategy: betting on reversals. We look at four techniques within this genre:

  1. buying support and selling resistance,
  2. betting on candle patterns,
  3. betting on gaps, and
  4. betting on divergence.

1. Buying support and selling resistance

As prices drop, eventually they may reach an area where we expect the fall to stop, an area where prices have stopped falling in the past. We can place an up bet in the hope that the fall will reverse. We are betting that a support zone will hold.

Similarly, as prices rise, eventually they may reach an area where we expect the rise to falter, an area where ...

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