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: Medium-term corrections or rallies within the primary trend, lasting from a few weeks to several months.
The book most often compared favorably to Trader Vic is Dr. Alexander Elder's Trading for a Living . The two books are frequently described as complementary—Elder excels at psychology, while Sperandeo excels at macroeconomics and risk integration. : Medium-term corrections or rallies within the primary
Sperandeo's 1-2-3 pattern is effective because it's based on the core principle of Dow Theory: trends are defined by a series of higher highs and higher lows (uptrends) or lower lows and lower highs (downtrends). When price action deviates from this pattern, the existing trend is likely exhausted. A variant of the 1-2-3, the 2B pattern
A variant of the 1-2-3, the 2B pattern identifies potential reversals following a false breakout. The method involves: the trade is over. No questions
: In an uptrend, price tests the recent high but fails to make a new one (or makes a "trial" of the low in a downtrend) .
Sperandeo suggests that the refusal to take small losses leads to large losses, which eventually leads to ruin. He outlines a strict rule: upon entering a trade, the stop-loss must immediately be placed. If the stop is hit, the trade is over. No questions, no negotiating.