1. The market was in a bearish trend.
2. This pullback took four downswings to resume the bearish
trend. The pullback upwards was strong enough to form a bull
trend line. But it was a bull trend line that failed almost
immediately after forming. Recall from the last section that this
was a bearish sign.
3. Soon after resuming the bearish trend, the market lapsed
into another multi-swing pullback. The fourth downswing in the
pullback could not resume the trend. Technically, according to
the rule of thumb I mentioned, it was a struggling trend.
But trading is not about rules of thumb. It is about what is really
happening in the market.
There were good reasons to downplay this supposed struggle of
the bear trend.
First, remember that we just saw a short-lived bull trend line. It
pushed our market bias towards the bearish side, and made us
more sceptical of the bullish price action that followed.
Second, the broken bull trend line has clearly flipped into a
resistance. Look at how price bounced off the bull trend line.
Given such a bearish context, the inability to resume the trend
by the fourth downswing was not a deal-breaker for traders who
were looking to short.
2. This pullback took four downswings to resume the bearish
trend. The pullback upwards was strong enough to form a bull
trend line. But it was a bull trend line that failed almost
immediately after forming. Recall from the last section that this
was a bearish sign.
3. Soon after resuming the bearish trend, the market lapsed
into another multi-swing pullback. The fourth downswing in the
pullback could not resume the trend. Technically, according to
the rule of thumb I mentioned, it was a struggling trend.
But trading is not about rules of thumb. It is about what is really
happening in the market.
There were good reasons to downplay this supposed struggle of
the bear trend.
First, remember that we just saw a short-lived bull trend line. It
pushed our market bias towards the bearish side, and made us
more sceptical of the bullish price action that followed.
Second, the broken bull trend line has clearly flipped into a
resistance. Look at how price bounced off the bull trend line.
Given such a bearish context, the inability to resume the trend
by the fourth downswing was not a deal-breaker for traders who
were looking to short.
The first tested pivot high A is enlarged in Figure 3-23. It
showed strong bullish momentum for the following reasons.
1. The break-out above the previous swing high went a good
distance before a downswing took over. The greater the
distance the market went beyond the last swing high, the
stronger the bullish momentum.
2. The first bar that broke the resistance closed above it. This is
a sign of bullishness.
3. Price cleared above the previous pivot high. When there is a
gap between the price bars and the resistance level, we say that
price has cleared the level. To clear a resistance level, the bar
lows must be higher than the resistance.
In all, the tested pivot high A showed strong bullish momentum.
showed strong bullish momentum for the following reasons.
1. The break-out above the previous swing high went a good
distance before a downswing took over. The greater the
distance the market went beyond the last swing high, the
stronger the bullish momentum.
2. The first bar that broke the resistance closed above it. This is
a sign of bullishness.
3. Price cleared above the previous pivot high. When there is a
gap between the price bars and the resistance level, we say that
price has cleared the level. To clear a resistance level, the bar
lows must be higher than the resistance.
In all, the tested pivot high A showed strong bullish momentum.
1. This trend line AB was the initial trend line.
2. In the pullback before this new trend high, price pushed
below the trend line AB. (Note the effectiveness of trend line AB
as a support level.)
3. The adjusted trend line AC contained all price action. Hence,
it was shallower.
There’s a point worth clarifying in the drawing of trend line AB.
It will help to drive home the trend line adjustment we are
talking about here. the first half is
enlarged.
2. In the pullback before this new trend high, price pushed
below the trend line AB. (Note the effectiveness of trend line AB
as a support level.)
3. The adjusted trend line AC contained all price action. Hence,
it was shallower.
There’s a point worth clarifying in the drawing of trend line AB.
It will help to drive home the trend line adjustment we are
talking about here. the first half is
enlarged.
1. The upwards sloping trend line was broken, and we got a
signal that the market might have turned bearish.
2. On the other hand, if we relied solely on the formation of a
valid pivot high to indicate a change in market bias, we would
have detected a change in bias later.
Trend lines also make up for a shortcoming of using valid pivots
to judge the market bias. Trends can reverse without forming
any valid pivots in the opposing direction. For instance, a bull
trend can turn bearish without forming a valid high. In such
cases, the break of a bull trend line will alert us to the trend
change.
Other than indicating reversals, trend lines also act as support
and resistance. Some of the best trades are bounces off trend
lines. On top of that, the slope of a trend line tells us the example of how a trend line gave an earlier
signal of a change in market bias.
signal that the market might have turned bearish.
2. On the other hand, if we relied solely on the formation of a
valid pivot high to indicate a change in market bias, we would
have detected a change in bias later.
Trend lines also make up for a shortcoming of using valid pivots
to judge the market bias. Trends can reverse without forming
any valid pivots in the opposing direction. For instance, a bull
trend can turn bearish without forming a valid high. In such
cases, the break of a bull trend line will alert us to the trend
change.
Other than indicating reversals, trend lines also act as support
and resistance. Some of the best trades are bounces off trend
lines. On top of that, the slope of a trend line tells us the example of how a trend line gave an earlier
signal of a change in market bias.
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Every signal comes with analysis proper entry exits and targets with minimum 1:2 risk reward ratio
Payment methods are Crypto wallet debit card chose any plan and get two ebooks free to join DM me
For those of you who want daily SIGNALS, MORE EDUCATION and ANALYSIS, join my VIP group. Offer for all members of this group:
1 month VIP membership: 19$
2 months VIP membership: 35 $
3 months VIP membership: 55$
6 months VIP membership: 85$
EBOOK + 7 months VIP membership: 118 $
Every signal comes with analysis proper entry exits and targets with minimum 1:2 risk reward ratio
Payment methods are Crypto wallet debit card chose any plan and get two ebooks free to join DM me
1 month VIP membership: 19$
2 months VIP membership: 35 $
3 months VIP membership: 55$
6 months VIP membership: 85$
EBOOK + 7 months VIP membership: 118 $
Every signal comes with analysis proper entry exits and targets with minimum 1:2 risk reward ratio
Payment methods are Crypto wallet debit card chose any plan and get two ebooks free to join DM me
Ak learn Candlesticks Charts & Patterns
GOLD SELL 1705 TO 1706 SL 1708.2 TP 1702.500
1704 TP hit 50 pips✅
The price broke above the previous lower high and made a new higher high (HH) which is an indication of a trend reversal and as a
result price ended up creating massive bullish movement.As you can see, the classical trend structure analysis can help you spot profitable
forex trade entries.
For any support contact us 👇
result price ended up creating massive bullish movement.As you can see, the classical trend structure analysis can help you spot profitable
forex trade entries.
For any support contact us 👇