Parabolic Theory: What is a Paraburst?
This is a parabolic theory coined by your’s truly. Since not much was available in the net pertaining to parabolic curve patters, pls take it with a grain of salt as to the veracity of the theory. Sample charts and sharing of thoughts from this blog were all extracted from a decade of personal studies and experiences.
Sharing of thoughts are posted in Stock Market Pilipinas FB Page. Hope someday will be able to compile all studies in a single document and have it published for free.
From our friends at BoH Bettor Society.. Definition of a Paraburst
A term coined by Senor Spyfrat, “paraburst” is a cataclysmic event that occurs at the end of a parabolic run. While the actual distribution phase from a parabolic may vary by degrees and time duration, as this is typically a function of commitment by sponsors and participation of the investing public, the ending characteristic is the same with bursts sharp and declines extremely painful.
As a reminder, Paraburst is not your garden variety correction that ought to be immediately bought on dips. The drops are sharp because sponsors are normally gone, early adopters who were not able to sell near the top often do so at any price to preserve gains, while late comers who’ve been sucked in are there to fuel the decline.
At some point on the deep retracement, sponsors can re-emerge to initiate a relief bounce (which are often tradeable and quite profitable if you’re coming in fresh), but such bounce are brief, with the math still in favour of sponsors, before the stock resumes its downward spiral. And other times, sponsors just never come back.
There is a certain criminality to it, sure, but it is what it is. The best thing you can do is to know the drill.
Again, Parabolic. Paraburst.
That’s it. Getting busy now.