Megaphone / Broadening Top Pattern Explained


Megaphone / Broadening Top Pattern Explained — with David Moadel hello friends and welcome to looking at
the markets with David Modell gonna go over a really simple pattern here it’s
called the megaphone pattern also sometimes called the broadening top and
occasionally it’s also called the broadening bottom so what you want to
look for is a series of higher highs and lower lows now this pattern indicates an
increase in volatility so therefore it could be a good time to put on an iron
Condor because you’ve got again higher highs lower lows and so you’ve got
volatility increasing in both directions the upside and the downside and that
could be a good time to put on an iron Condor to capitalize on the increase in
volatility also remember it’s also called a broadening top or sometimes a
broadening bottom but you don’t know or it’s hard to know whether it’s bullish
or bearish until it breaks out to the upside which would be bullish or breaks
down to the downside which would be bearish so whether it’s really abroad it
ends up being a broadening top or a broadening bottom it’s kind of hard to
know that until it either breaks out or breaks down and by the way throughout
this video I just want you to know that if you need more help you can email me
anytime my email address is David Modell at gmail.com I do coach people and I
help people put together trading and investing plans so feel free to email me
if you want some help with that alright let’s look at some examples all
right well first before we look at an example these are the patterns and these
are megaphone patterns they kind of look like a megaphone okay we talked about
lower lows okay so lower lows right and then higher highs and again whether it’s
bullish or bearish whether it ends up being a broadening bottom or top it’s
hard to know until it actually Souder breaks down alright but I will
say that most people would consider it bullish if it escapes from the megaphone
to the upside if there’s a clear break if one of the candles breaks and better
yet closes if the candle closes clearly above the top of the megaphone okay that
could be considered bullish a lot of people would and it could be considered
a bottom because you finally hit the bottom and then started turning up and
on the other hand if it breaks down meaning it breaks out to the downside
better yet if the candlestick closes clearly below the bottom of the
megaphone pattern that could be considered bearish and it can be
considered a top so be a broadening top because it reached the top and then
started turning around and going down but again it’s hard to know until it
actually really breaks out from the top or bottom here I’ll show you what I mean
here’s an example of it this is from Trading Viacom I like their charts and
you can see the action here you can see how it’s bouncing between you know the
lower lows you got your higher highs and notice it’s not perfectly clean like
it’s it almost never looks like a textbook does it it doesn’t look like
the textbook examples all right it’s always a little sloppy you’re looking in
real life and so you have to apply some interpretation to it sometimes but you
can see it bouncing off the the bottom and the top bouncing bouncing and here
it looked like it was going to possibly break out but that was a head-fake as
they say or at least a false breakout not really a breakout alright and so you
keep going and then hear it clearly closed above the top of the megaphone
above this resistance line here alright so that that’s what and and it’s also it
also helps if it’s a green candle and it’s a that’s a pretty
sizeable green candle there so it really closed well above the resistance line
here at the top of the megaphone and so that’s pretty bullish a lot of people
would say all right so that turned out to be a broadening bottom according to
the chart here ok so again check these out
megaphone patterns broadening top broadening bottom increase in volatility
you might want to consider an iron Condor putting putting one on there to
benefit from the increase in volatility look for those higher highs and lower
lows and check for the breakout or breakdown to decide or help you decide
whether it’s bullish or bearish if you need more help my name’s David Modell
you can email me I can help you put together a trading plan or investing
plan alright if you like this video please give it a thumbs up on YouTube I
appreciate that leave a comment does this work for you do you like this
pattern do you not like it let me know I like the feedback I appreciate it and if
you haven’t subscribed yet hey what are you waiting for
come on go ahead and subscribe and hit that notification bill on YouTube so you
can continue to receive updates whenever I put out videos like this hey thanks a
lot I really appreciate it I’ll talk to you again soon you

9 thoughts on “Megaphone / Broadening Top Pattern Explained”

  1. Okay I got my pencil ready. Although I don't day-trade anymore I still enjoy looking for forming patterns in the charts.

    Thanks for this, David!

  2. I tip my hat to you my guy. Your tips,advice, and display of knowledge has excelled me over this past year. I guess your my mentor in a way cause your ways are the most informative and logical to me and I'm also able to transform them into my own strategies and niches so thanks big dawg.

  3. David its pleasure watching Your videos. I really understood these indicators very well. David why can't you just add super trend video also.

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