Timing V reversals using the Narrowing Channel + ROC
Submitted by bigcat9 on Mon, 02/11/2019 - 11:46This setup is a slight modification of the Falling Knife setup in Chapter 11 of the book "Explosve Stock Trading Strategies". This is highly effective for timing V reversals in Indices as shown in the SPX example below. Using This startegy and either of the two entry points one would have been able to get in close to the bottom.
The setup is as follows:
(1) PPO and ADX should form a narrowing channel as shown below. This does not happen often and is usually the first requirement for a strong V reversal
(2) Pick the point where the V neck of the Channel forms