Hello guys! today we will analyze BA. We are planning on developing a setup here, and we want to explain the full idea.
The first thing we should see is the big picture: We have a broken descending trendline with a massive corrective pattern on the edge of it. If you check the logarithmic chart on the weekly timeframe, you can see that this situation has happened a lot of times in the past
Based on the research we made, one of the ways of trade this situation is waiting for the breakout of the big correction on the edge of the descending trendline and look for a smaller correction to trade. This provides us with a big risk-reward ratio that also allows us to fail many times until we hit the correct setup. Based on historical data, this setup has a success rate of around 55% and an average risk-reward ratio above 3, which is something PHENOMENAL!
The target we will be using is the higher part of the expanding channel.
What happens if the setup nothing happens? Beautiful answer for that: You don't trade
What happens if the price executes the setup and then it goes straight to the stop loss area? Another beautiful answer for that: you lose 1%, no one has died because of that.
Thanks for reading, guys! If you have any doubt about this or any vision you want to share, just write it in the comment box. Have a good one.