Price creates a new high, pulls back, and then rallies to break above that high. However, if the price fails to sustain the momentum and quickly closes back below the previous high, a 2B sell signal is triggered.
Focus on low-risk, steady gains rather than hitting "home runs."
The most famous practical contribution of the book is his – simple, logical, and based on price action alone.
A more aggressive setup. In an uptrend, price makes a new high (point B) but immediately reverses and falls below the previous high (point A). The "2" stands for the second high; "B" for break. This is a false breakout – a powerful reversal signal.
Prices must stop making new highs in an uptrend (or new lows in a downtrend).
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: Risking capital for large gains only after the first two goals are secured. Key Technical Trading Methods
The medium-term waves. These are corrections or rallies counter to the primary trend, lasting weeks to months.
In an uptrend, prices must break below the primary upward trendline.
Sperandeo is best known for two price action setups designed to identify trend reversals:
When all three conditions are met, it signals a high-probability trend reversal, offering traders an entry point with a clearly defined risk level. 3. The 2B Indicator (The "Vic Trap")