| Trend development generates pockets of thin participation and ownership. Volatility may surge violently when price reenters one of these levels. Locate these "Clear Air" pockets by looking back at past vertical bar movement. These zones represent a high-profit playground for the aggressive trader. But not every CA can be easily traded. Some exhibit wild and unpredictable reversals midstream. The best measure of the pattern's dependability comes from careful review of the prior passages. Look for well-defined CA extremes with limited whipsaws from one end of the range to the other. Once located, consider a position with a tight trailing stop when price enters one end. Then exit the trade when: a. price reaches the other end, or b. the number of price bars reaches the average duration of prior passages. |
