The final look at the daily chart of EXPE illustrates how the end of the trend can begin to play out. This plays directly into the Type II Counter-Trend strategy.
A crucial part of fading an existing trend is a clear understanding of divergence and a shift in the momentum. In the previous examples, we've looked at EXPE through the lens of the Stochastic Sell strategy. Now with the target being met and the Regression Trend channel being broken, I am now focused on what market phase comes next.
Keep in mind that these types of trades (counter-trend) are more risky, but all strong market moves typically start with a Type II Trade. Refer to page 164 in the Foundation Course Manual for a step by step instruction of the Type II trading process. This Type II Trade is referred to as a positive divergence.
Trade Smart...
~Duane Gott
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