Suppose there’s a guy named Xiao Tan who sells bus tickets at the county bus station. He only checks the daily chart after the last bus has left. He doesn’t buy the first candlestick that closes above the previous high. He only trades under one set of conditions: first, he marks the highest price among the 20 daily candlesticks before the breakout day, then waits until two consecutive candles both close above that price. Only then does he buy at the second candle’s closing price, and he makes just one purchase. His exit rule is fixed too: he sells only when the price closes back below that level; an intraday dip below it doesn’t count.
These 20 $ALT daily candlesticks run from September 30 to October 19. The highest price occurred on October 17: 0.00981. Although the price touched that level during the day on October 17, it closed at just 0.00862, so he didn’t count it as a breakout. On October 19, it closed at 0.00922, still 0.00059 below 0.00981, a shortfall of 6.01%.
On October 20, it opened at 0.00922, reached a high of 0.01107, fell to a low of 0.00901, and closed at 0.01003. The close was 0.00022 above the previous high of 0.00981, or 2.24% higher. This was the first candle to close above that level, so he didn’t buy yet.
The next day, October 21, it opened at 0.01003, reached an intraday high of 0.01562 and a low of 0.00949, then closed at 0.01302. That was 0.00321 above 0.00981, or 32.72% higher. Two consecutive candles had now closed above that level, so the conditions were met, and he bought at 0.01302. After that, he would wait to sell only if the price closed back below 0.00981.
On October 22, it opened right at his cost basis of 0.01302 and reached a high of 0.01339, just 0.00037 above his cost, or 2.84%. It dropped as low as 0.00746, which was 0.00556 below his cost, a decline of 42.70%. It closed at 0.00822, down 0.00480 from his cost, or 36.87%. The close was 0.00159 below 0.00981, a decline of 16.21%, meaning it had already fallen back below that level. Following his rule, he sold at 0.00822.
If he hadn’t sold, it would have closed at 0.00736 on October 23, 43.47% below his cost and 10.46% below his selling price. If he had held until November 9, it would have closed at 0.00531, 59.22% below his cost and 35.40% below his selling price.
Have you ever waited specifically for a second consecutive close above the previous 20-day high before buying, only to see the price close back below that level the very next day?
These 20 $ALT daily candlesticks run from September 30 to October 19. The highest price occurred on October 17: 0.00981. Although the price touched that level during the day on October 17, it closed at just 0.00862, so he didn’t count it as a breakout. On October 19, it closed at 0.00922, still 0.00059 below 0.00981, a shortfall of 6.01%.
On October 20, it opened at 0.00922, reached a high of 0.01107, fell to a low of 0.00901, and closed at 0.01003. The close was 0.00022 above the previous high of 0.00981, or 2.24% higher. This was the first candle to close above that level, so he didn’t buy yet.
The next day, October 21, it opened at 0.01003, reached an intraday high of 0.01562 and a low of 0.00949, then closed at 0.01302. That was 0.00321 above 0.00981, or 32.72% higher. Two consecutive candles had now closed above that level, so the conditions were met, and he bought at 0.01302. After that, he would wait to sell only if the price closed back below 0.00981.
On October 22, it opened right at his cost basis of 0.01302 and reached a high of 0.01339, just 0.00037 above his cost, or 2.84%. It dropped as low as 0.00746, which was 0.00556 below his cost, a decline of 42.70%. It closed at 0.00822, down 0.00480 from his cost, or 36.87%. The close was 0.00159 below 0.00981, a decline of 16.21%, meaning it had already fallen back below that level. Following his rule, he sold at 0.00822.
If he hadn’t sold, it would have closed at 0.00736 on October 23, 43.47% below his cost and 10.46% below his selling price. If he had held until November 9, it would have closed at 0.00531, 59.22% below his cost and 35.40% below his selling price.
Have you ever waited specifically for a second consecutive close above the previous 20-day high before buying, only to see the price close back below that level the very next day?