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Chapter 20, Part III. Trading Fakeouts. Page 6

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 22, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Commander in Pips:
    Great work! I hope you will reread that material. Still, today I want to show you some additional possibilities that will allow you to not be hurt by market action in fakeouts.

    Let’s start from a simple trend line:


    Chart #1 | 30 min EUR/USD
    [​IMG]

    Here we see three fakeouts. Even you’ve adjusted trend line based on first failure breakout (dashed grey line), the second and third failure breakouts will happen. The nature of price movement develops so that price action comes off the line for some distance and then gravitates back to the trend line again, finds support there and then the cycle repeats again. This is the market’s breathing around a trend line. We have spoken about that already.



    Since there is no absolute on the market, during such a gradual moving market, price could penetrate the trend line from time to time. You can use this penetration to fade breakouts and trade them.
     
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