Congratulations! Your chart has been selected to be highlighted as the post of the day. This is a great example of a trendline breakout.
Muet786
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THNKS
Csys
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No offence, but it seems the posts of the day are carefully selected among the worst examples of market phenomena. Let's see if this one will work.
PeterHansen
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yea havent been so lucky with them lately
Csys
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It's not only about not being lucky. Let me explain. You know, there is no "always" and "never" in technical chart studies, and even the most infallible formations may result in disappointing price activity. When that happens, you're unlucky. But you're not unlucky when your analysis is not elaborate enough. For instance if you label a chart with "indicator divergence" prematurely, it's your fault and not the market's. As for the ideas selected as the FXCM picks of the day, whenever I see them, I see an immature technical eye. It's like the author has just learnt a market phenomena and seen a resemblance between a chart and that phenomena. Then, they publish an idea with a wrong or unconfirmed conclusion. This is pretty normal to beginners or elementary-level speculators, but the problem is those ideas are selected as the ideas of the day. I am in no way a market expert, though I think what I see should be seen by the experts, too, and I don't understand how those worst examples are picked by FXCM as the best examples.
This very idea, as an example, is constructed without taking into account the broadening nature of the upward movement. To make it clear, let me share the chart:
It doesn't matter whether you use the semilog or arithmetic scale; the trend line is not broken. Just because an arbitrary line is traversed by an indecisive amount of price activity, it does by no means signal a continuation of the downward movement. On the other hand, I have to make it clear that the market in this situation MAY go downward, but it doesn't disprove my point. Whoever shorts the market because of the TL breakout shown in the OP is missing the point of the phenomenon of TL breakout. This is what I'm saying.