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@Veritas2000
Apologies for late reply i will try and explain , the more experienced may be able to explain better.
But basically there is a three day rule where if a stock rallies and SP has risen over three days and usually with good/large spread the third day will most likely be the last day of uptrend before a pullback(quite often you can see it on the third daily bar, as the third bar will close lower off the high leaving a wick indicating rally is over)
Also 3 day rule can be applied to selling on the downtrend (consider waiting for three days of selling before trading)
Three day rule also coincides with 3 day settlement
Not a perfect science just another tool to help with decisions
Hope this helps
This was the chart i was referring to last night
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- Day Trader’s Aftermarket Lounge 20 May 2020
Day Trader’s Aftermarket Lounge 20 May 2020, page-17
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