Posts Comments


ISLANDS are relatively rare, but patterns that are mistaken for ISLANDS are not. The pattern doesn’t just gap into the ISLAND, it also gaps from the ISLAND back into the prior trading range. Reversing into the gap, instead of beyond it, only mutes the reversal’s effects.

  1. False break




Volume tends to be lackluster prior to the gap that starts the ISLAND. The trend is not finished, but buyers seem to be. As a consequence, the ISLAND fails to generate sponsorship for its attempt to reinvigorate the trend.

The gaps make the ISLAND difficult to trade. The pattern’s attractiveness is mainly in its ability to clearly identify that the trend has reversed.