This is another simple idea, in which we look for a similar situation in the past, and we study how the price evolved from being inside a consolidation to starting a new impulse.
In this case, we have a clear scenario starting in February of 2020 with similar proportions in time and %decilene to the current one.
Yesterday we had the first attempt at a breakout of the current consolidation. Based on that, we will explain what we are looking for before trading:
a) A corrective pattern on the edge or above the last descending trendline of the consolidation.
b) The size of the corrective pattern must be similar to the size of the circle (it can take 6 to 7 days to be completed)
c) IF that happens, we will develop long setups using the horizontal green and red lines you can see on the chart as our Entry level / Stop level / Take Profit level. Our objective is to develop a setup that can give us a risk-reward ratio of 2 (that means that for every dollar we are risking, we are aiming to make 2 dollars)
Thanks for reading!
In this case, we have a clear scenario starting in February of 2020 with similar proportions in time and %decilene to the current one.
Yesterday we had the first attempt at a breakout of the current consolidation. Based on that, we will explain what we are looking for before trading:
a) A corrective pattern on the edge or above the last descending trendline of the consolidation.
b) The size of the corrective pattern must be similar to the size of the circle (it can take 6 to 7 days to be completed)
c) IF that happens, we will develop long setups using the horizontal green and red lines you can see on the chart as our Entry level / Stop level / Take Profit level. Our objective is to develop a setup that can give us a risk-reward ratio of 2 (that means that for every dollar we are risking, we are aiming to make 2 dollars)
Thanks for reading!
