- Identification Guideline
Launch Price
The launch price is where the big W begins. It is located on the left side, at the top of the big W. It is where the swift drop into the first bottom begins. Think of it as the edge of a cliff
Fall
Starting from the launch price, the stock make a steep drop, often in a straight line run, leading down to the first bottom. The ideal pattern has no pauses along the way.
Height
The height from the launch price to the first bottom should be extensive, often twice as tall as the distance from the first bottom to the peak between the two valleys.
Twin Bottoms
Two valleys bottom out near the same price but allow variation. The average price difference between bottoms is less than 2%
Breakout
When price closes above the highest peak between the bottoms, a breakout occurs and you have a valid big W. If, instead of breaking out upward, price first closes below the lowest valley, then you do not have a big W.
W shape
The completed chart pattern should look like a W.
