The kangaroo tail is a model that signals trading opportunities for traders. It’s included in Alexander Elder’s book, Come Into My Trading Room.
Tails can be marked to reverse the trend in the markets. While trends take a long time, kangaroo tails emerge in a matter of days.
The kangaroo tail pattern takes at least three bars to complete. A tail is a bar chart or a bar chart of candle sticks, nailed in the direction of a trend, surrounded by narrow bars at the beginning and end. That middle bar is the tail, but traders won’t know for sure until the next day they make a reversal when they quickly squeeze a bar or a stick at the base, leaving the tail hanging.
Market tails often occur at turning points in the markets, offering traders the opportunity to trade. Traders should recognize the tails and trade against them. Whenever traders see the tail, they should be ready to place a bargaining position against that tail before it closes.
When traders enter the trade using their tails, they should place protective stops approximately halfway up their tails. If the tails are chewing, take them out without delay. In terms of profit targets, moving averages and channels can be set.
The kangaroo tail pattern is one of the most reliable reverse patterns, especially when supported by signals from other indicators. In addition, the model could be used at any time. The tail produces more movement over the shorter period of time than the tail in a shorter period of time.