These are non-negotiable and must be set before the trade is placed. Why the PDF Version is Popular
These methods are based on human psychology and economic fundamentals, which do not change, making them as valid today as when the book was written. These are non-negotiable and must be set before
The chart below illustrates how the 1-2-3 reversal pattern is identified following the breakout of a correctly drawn trendline: Sperandeo, V
: The price falls below the most recent support level, confirming the reversal. John Wiley & Sons
Sperandeo, V. (1993). Trader Vic: Methods of a Wall Street Master. John Wiley & Sons.
After breaking the trendline, the price will usually attempt to resume its previous direction. In our downtrend example, the price will drop again, testing the recent low. For a valid 1-2-3 reversal, this pullback must fail to breach that previous low. It creates a higher low. Step 3: The Breakout (Confirming the New Trend)