[yellowcup]

Hello Guys!

First of all, thank you @issatrader for this blog this is very helpful in the trading community.

My question is, how can we differentiate a Stage 2B on a Stage 3.


See chart below for analysis. I've excluded the stock name so that we can only focus on price action.

Thank you.

Hi yellowcup,

Nice to have you here! I am not Isatrader and not as experienced as him, but maybe i can still help / have a guess.

I would  start with a definition of stage 2b / 3. Basically, stage 2b means an uptrend that is in a later stage (but is still an uptrend). An uptrend is defined by a series of higher highs and higher lows. 

Stage 3 is the topping phase. That means, the stock is not anymore powerfoul enough, to make a higher high.

-> Conclusion: if the stock (see your picture) is not able to make a higher high, you are probably in the transition to stage 3 or already in stage 3 (topping phase). 
It is the same with stage 4 and the transition into stage 1: the first higher low after the decline may signal a new stage 1 basing period.

I really hope, that this may help you out

@fabi470,

Thanks for the detailed answer. 


It is still better to have known different ideas and perspective how to interpret the stages.

more profit to you on your trading.