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This signal pattern is triggered by a bearish 100% pole that immediately follows a double bottom pattern. It is a 6-column pattern.
1 – Bearish 100% Pole (Read the 100% Pole description)
2 – Double bottom sell pattern
There shouldn’t be a double top buy signal before the breakout.
As the bearish 100% pole pattern did not fail immediately, it provides confirmation of the pattern. It also shows the strength of the bears and offers an affordable trading opportunity. A 100% pole pattern has a strong retracement, making the initial risk unaffordable. This formation addresses that concern.
Prashant Shah introduced this concept and explained this pattern in his book on Point & Figure charts.
This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.