“Most people would rather lose money than admit they are wrong.”
A 2B occurs when price makes a new high (or low) but fails to sustain it, quickly reversing. This is a powerful entry signal. For example, in an uptrend, if price pierces a previous high but closes below it, go short with a tight stop above the false breakout. This catches many traders on the wrong side of the market. “Most people would rather lose money than admit
Victor Sperandeo's "Trader Vic: Methods of a Wall Street Master" outlines a trading philosophy centered on capital preservation, trend-following technical analysis, and psychological discipline, with a focus on the 1-2-3 reversal and 2B false breakout patterns. The book integrates economic forecasting and strict risk management to achieve consistent profitability and superior returns. A detailed summary of the core principles is available at Business Insider . This catches many traders on the wrong side of the market
This pattern is a specialized refinement of a failed breakout. It occurs when the price makes a new high but quickly reverses and closes back below the previous peak. Sperandeo views this as a high-probability signal that the market is exhausted, providing an early entry for a reversal trade with a tight stop-loss. A detailed summary of the core principles is
The subtitle says it all: Methods of a Wall Street Master . Not “guessing,” not “hoping,” but methods — repeatable, rule-based, probabilistic approaches to trading stocks, bonds, futures, and currencies.
: In an uptrend, price tests the recent high but fails to make a new one (or makes a "trial" of the low in a downtrend) .