Memory of Price Strategy – Definition

Cite this article as:"Memory of Price Strategy – Definition," in The Business Professor, updated January 10, 2020, last accessed September 23, 2020, https://thebusinessprofessor.com/lesson/memory-of-price-strategy-definition/.

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Memory-Of-Price Strategy Definition

A memory-of-price strategy is a trading strategy in which double top and double bottom resistance points influence future prices of products. According to this strategy, when the resistance points are broken, market prices are influenced.

A double top is a term that describes two consecutive or successive increases to a price level while a double bottom refers to two equal reversal in price. A double is otherwise called a resistance price and a double bottom is called a support price.

A Little More on What is Memory-Of-Price Strategy

This memory-of-price strategy is a trading strategy believes that a great amount of purchase and sales need to occur before prices can exceed or decrease below the double top and double bottom points.

A double top occurs when two successive increases to price level and double bottom occurs when two price reversal or decline levels. The memory-of-price strategy offers a low-profit margin and higher risks to traders who use it.

An Example of a Double Top Pattern

A double top is a chart pattern that indicates two consecutive peaks in price, despite that this looks positive, it signals a decline in price. Once prices have reached a peak in a successive manner, double bottom occurs, this is when prices come back to the floor level. The floor level is inevitable because when the value of a product or asset is no longer increasing in value, prices cannot remain at the peak, they have to come back to the floor level.

References for “Memory-Of-Price Strategy

https://www.investopedia.com › Trading › Trading Strategy

www.investorwords.com/18743/memory_of_price_strategy.html

https://tradeforexsa.co.za/forex-education/memory-of-price-strategy/

https://www.niftylivecharts.com/blog/memory-of-price-strategy/

www.forex-ratings.com › Forex articles › Forex strategies

https://www.carigold.com/portal/forums/showthread.php?t=670343

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