0. Distribution 1. Sharp drop 2. Broadening wedge (accumulation) 3. Uptrust 4. Consolidation sideways (currently) or wedge 5. Sharp pull back to a trend line 6. Uptrust to previous high 7. Continue descend
Comment
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For this trade i will wait for the sharp drop and enter long on a trendline support with divergence on the lower time frames, with a stoploss below the trendline.
in case of going straight through of support trend line - would this setup be invalidated or still possible to shoot up to previous highs? thanks
Bullbrain
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@AndySmart, it is still possible, because it will freak out a lot of people and some big players might take advantage of that, therefor it's important to look at the lower time frame charts for the strength details.