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Chapter 14, Part VII. Triangles. Page 4

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

    Aug 28, 2009
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    Commander in Pips: Well, it’s not so simple:

    1. As a rule we assume that a breakout should happen, right? If we do not assume that, then, possibly we should stay outside the market, because in this case we do not want to trade on a choppy market with a tight range and absence of any direction.

    2. The safest way to trade – wait to confirm the fact of breakout and make sure that this was a true breakout. Then wait for the first Fib retracement and use it to enter in the direction of the breakout. On Chart #1 such retracement you can see, when the market has reached 100% Fib extension target and 0.9750-1.000 area.
    Pipruit: Well, but market has passed significant move, we had to skip a solid move in this case…​
    Commander in Pips: Right, but this is not always the way it happens. Very often after breakout, the market returns back and tests the border of the triangle from the other side. This kind of price action could give you an excellent opportunity to enter and place a tight stop inside the triangle body, because if market returns back to the inside, then the breakout was false.

    Second, sometimes the market shows acceptable retracement very soon after breakout. But anything could happen, so probably you will miss some triangles. Still it’s better than to miss your money, right?
    Pipruit: Right…​
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