ABSTRACT
What is a bottom, what is a top? (EN9: In this extremely important chapter I have left intact Magee’s usage of “Tops and Bottoms.” It will be less potentially confusing for the reader to think of “highs and lows” as that terminology is commonly used in the business in the modern era. Also, thinking in terms of highs and lows is an important concept in itself. Thus, for a Bull trend, higher highs, higher lows. And when this pattern is broken in an important way, the trader should be alert for a trend change. And, as the use of eighths is of the essence in Figure 28.1, I have left the discussion in eighths, although the reader knows that decimals are now used in the markets.)
In this chapter, we are not talking about what makes a Major Top or Bottom or what makes an Intermediate Top or Bottom. We are speaking of the Minor Tops and Bottoms that give us important hooks on which to hang our technical operations. Stop-order levels, trendlines, objectives, and Supports and Resistances are determined by these Minor Tops and Bottoms. They are of prime importance to us as traders. (For illustrations in this chapter, see Figures 28.1 through 28.4.)
Usually, these Minor Tops and Bottoms are well marked and perfectly clear. Often they are not. Sometimes, it is not possible to say denitely that this or that place is or is not a Top or Bottom. But it is possible to set certain standards, practical working rules, that will help us in making these points, and these rules will not fail us too often.
