Spike Rules

How do we trade a Spike?

 

 Here are some simple rules to trade a spike

 

Upward spike

A price opening below an upward spike would be considered negative since the price probe or spike was rejected leaving a selling tail. An upward spike rejected can be used to sell into the market with stops at spike highs

A price opening above a spike high is considered positive and longs can be added. Stop loss is the lows of the spike

Downward spike 

A price opening above a downward spike would be considered positive since the price probe or spike was rejected leaving a buying tail. A downward spike rejected can be used to buy into the market with stops at spike lows

A price opening below a spike low is considered positive for sellers and shorts can be added. Stop loss is the highs  of the spike

Opening in spike 

Opening within a spike shows price acceptance and keeps the move  intact; the price has found a level where two-sided trade is taking place

 

 

More information on how to use Market Profile Trading setups is at – https://vtrender.com/market-profile-terminology

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