2B Rule: In the upward trend, if the price hits a new high, fails to continue to rise, and soon falls below the previous high, the trend is likely to reverse downward; In the downward trend, the price passed a new low but failed to continue to fall, and soon rose above the previous low, so the trend is likely to reverse upward. Because two high points or low points are similar, such as the letter B at the top or bottom, and because the letter B at the top and bottom may appear, it is called the 2B rule.

However, it is very risky to trade against the trend with the 2B rule. If we want to use this rule more rationally, we should also find its root.

2B rule is based on "key position"

2B rule is simplified from the idea of 123 rule, because the latter requires three conditions, while the former only needs two conditions. Both of these laws try to find the reverse signal of the trend earlier. The law of 123 is also related to the high and low points of Dow theory, and also combined with the trend line. The 2B rule is directly related to the high and low points, and it is a simple "position theory" without the limitation of the trend line. Therefore, the 2B rule is not so much a simplification of 123, but a bold application of "key position".

According to the principle of 2B law, 2B law has a very high risk of failure, because price retreat is a normal performance. To reduce the risk of failure in using the 2B rule, we can refer to several points in combination with key positions.

(1) Whether the time interval is large. The longer the time span between two highs and lows, the more critical the historical position. Once the breakthrough fails, the greater the probability of price reversal.

(2) Whether to reverse the correction trend, that is, if the 2B rule reverses the secondary and short-term directions and conforms to the main direction, then the probability of success is greater.