One of the four basic patterns that exist in trading, is the Rally-Base-Rally (RBR) when trading.
You now have one of the four of the patterns that exist in trading. Any of your more complex patterns that you’ve read about consist of a series of these patterns. I intentionally chose not to label any of the “classic” technical analysis patterns. One of the more interesting things I’ve noticed from my years of trading is the desire by people to make what should be simple into something very complex.
You should see some of the complicated charts I’ve been shown! Now, I mean no disrespect to the traders out there who use multiple Fibonacci-butterfly-overbought/sold-crossing-confluence indicators to trade, provided they are making money. If you are using all of that stuff and NOT making money, perhaps you should simplify your charts! It doesn’t get much simpler than these four basic patterns.
The rally-base-rally is a type of demand zone which forms during an up-move.
The name from the market structure which creates the demand zone. In the example on chart, you can see first we have a rally, then a consolidation, and finally another rally which creates the demand zone itself.
A rally-base-rally will always from a demand zone, they never create a supply zone.
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