NAKETAKA-SAN

Trading the Parabolic Curve Pattern

BITMEX:XBT   Bitcoin
A stock moves parabolic at the end of extreme uptrends, and this pattern is seen when panic buying sets in and prices are driven almost to a vertical point. During a parabolic uptrend, there is a near-complete absence of sellers, which creates a vacuum that permits nothing else but buying activity. As prices rise, more buyers flock in. Fear is conveniently left behind as more traders rush into the trend just to get a piece of the action regardless of price. Moves that occur in parabolic fashion can make the largest price moves in the shortest amount of time, but are very dangerous places to enter long positions when the party is about to come to an end. When an asset moves parabolic, it often marks the end of a move with prices not returning to the ultimate highs again for a long time.
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