It defines a market action that passages an excessive distance in a brief period, usually moving in a rushing style that looks like one half of a parabola. The parabolic move can either be down or up, but most of the times are up.
When market prices are rising at fast increasing speed, they develop a parabolic curve, which should cause the investors to sense ever-increasing signal. It is challenging to know the final top of parabolic moves because of the passion of buying driving the change.
Parabolic ever-increasing moves are sensational to ride, but there is always a firm risk that the rocket will run out of energy resulting in the speedy downfall of prices. Usually trying to pick the final top of parabolic moves can be dangerous and risky to one’s health, but being conscious of possible hazard can be beneficial in managing a better position.