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Chapter 14, Part VII. Triangles. Page 8

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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    Here you can see, what could happen in such situation as on AUD/USD weekly chart#5.


    Chart #5 | AUD/USD Weekly and market pressure.
    [​IMG]

    All quite the same, but on chart #6 you will see how cunning could be market makers. Here you can see, that during the week, the market has shown the breakout of the triangle. Public, as usual has taken it and place stops above the triangle. Very obvious, predictable and…wrong. What will the market makers answer? See chart #7.


    Chart #6 | AUD/USD Weekly and public thoughts.
    [​IMG]


    Chart#7 | AUD/USD Weekly - market makers answered:
    [​IMG]
    Pipruit: Cool! But Commander, what we have to do in such circumstances?
    Commander in Pips: Well, first of all – always use a common sense. Don’t be deceived by a picture. We see that the trend turns bearish but the market creates higher lows and stands straight. It means that bears couldn’t push the market lower, hence the bulls are strong, but their strength is hidden in this type of price action, their strength is in pressure on bears.

    Suppose, that you have entered on unconfirmed breakout as public did. But, at the end of the week – you see, that there is no confirmation, hence your initial context for trading has failed – you have to close position. Since the market has returned back inside the triangle, it does not intend to break it to the downside, because this is unnatural price action and this reestablished the previous context of market bullish pressure. Here you should enter on the long side. What has happened then – you can see on chart #7.
     
    #1 Sive Morten, Dec 21, 2013
    Lasted edited by : Apr 1, 2016
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