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| Learn to recognize the early warning signs for a change in trend. The evolution from trending into a rangebound or reversing market requires that you shift your trading strategy to capitalize on the new conditions. First Rise/First Failure offers an effective visual tool to beat the competition at this important task. As markets trend, they periodically pull back and retrace segments of their dynamic price waves. But no retracement should exceed 60-70% of the corresponding trend leg. When it does, the trend in that time frame has been reversed and price will likely give up 100% of that leg. This triggers a First Rise or First Failure, depending on the direction of the prior trend. Note how this MACR FR/FF evolved into the first leg of a well-defined descending triangle reversal. Get defensive when you see a FR/FR and stay that way until the old high or low gets taken out. |
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