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Chapter 14, Part VII. Triangles. Page 7

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Advanced talk on breakout direction

    Commander in Pips: Although the next chart is not currency – this is 2-year US Treasuries notes, but later I show you the same example on AUD.

    Here you can see ascending triangle. But take a look at MACD! It clearly shows excellent bear trend. Do you see any bear trend on the chart?


    Chart #4 | 2-year US Treasuries monthly and market pressure
    [​IMG]
    Pipruit: No, I just see, that market stands in consolidation, and this is triangle.​
    Commander in Pips: Right. It means that price action does not support trend shifting and such situation calls as “Market Pressure” or “Dynamic Pressure”.
    Pipruit: And so what? How should I interpret it?​
    Commander in Pips: Think by yourself. If trend turns bearish, but market stands…
    Pipruit: Well, possibly it tells that bulls are stronger than it seems at first look.​
    Commander in Pips: Absolutely. Market accumulates energy and as we can say that trend couldn’t force price to follow it. Here we see an example of Bullish pressure. The result of it – is an upside splash that should take out previous highs.



    Pipruit: So, the market should continue its move up and accomplish triangle’s target, right?​
    Commander in Pips: No. The target is only the highs takeout, but will the market continue to upside or not? – who knows. But this is already a great advantage to you. You know what to expect. That’s why you will not enter short until that will happen. Second, you know what to expect. For instance if market takes out the highs and shows bearish engulfing – you understand that this is false breakout and enter short right on top.
     
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