Anti-Signal

A signal bar that runs counter to the context, i.e. has a tendency to fail. For example, in a strong incomplete bear trend, the market forms a bullish continuation signal in the midst of a corrective leg. We at TraderSkillset.com will side with the context. In other words, we should look to trade the break-down of the bullish anti-signal bar when it fails to provide proper follow through, thereby trapping bullish traders who took the bullish signal without considering the bearish context.

An anti-signal can also be a strong trend bar in either direction, that appears in a sideways moving, low volatility market between the boundaries of the range. We trade the failure of such a trend bar. When the market remains in a range, sell rallies and buy dips until it actually breaks out.