Trading chart patterns is an inexact science. Two smart and experienced traders can view a chart in very different ways, based on their biases, mental makeup, psychology and a variety of other factors. Let’s take a look at SWN:
An argument can be made for three different chart patterns. One with a bearish outlook might see a double top forming. A bullish position trader may argue a trend is in place with a buypoint around the moving average. A more aggressive swing trader would note that an NR7 has printed and the time for entry is now.
Who’s right? I don’t know. What’s more important is which trader will manage the trade better. If you want to have a long and productive trading career, you must be obsessive about managing your entry exit and risk. I would rather be the guy who was wrong about this pattern but only took a small loss, than the guy who nailed this trade, exited too soon, and used too wide a stop on his next trade.