NASDAQ: Ascending Channel Suggests Correction.
An ascending channel has formed in the 1hr time frame. The reason why an ascending channel is suggestive of weakness is
that the price action makes a higher high immediately followed by a correction followed by a higher high, which implies the
bulls can not buy it up higher as every time they do the bears regain temporary control of the price action and correct it.
This back and forth implies weakness on both the bulls and bears. Usually an ascending channel implies weakness and are often
(not always) followed by a correction. Notice that the STOCHASTIC oscillator is buried in overbought for now.
This will be the test that the markets must pass in order to move higher.
Note to technical analysts beginners:
Because we use technical analysis we only trade what we see and we MUST put away our biases if we are to succeed. This is contingent on TRUSTING our
analysis. I hope that I have demonstrated in the short time I have been posting that correct analysis can lead to great rewards, but
we must have a. practice and knowledge of how to use TA b. Be able to TRUST our hypothesis and c. We must acknowledge our biases but
not let them interfere with our analysis. If we are extremely bearish but the charts says that this instrument will be bought up, we must
trust our analysis and check our biases at the door.
Note on correct risk management: Great technical analysis is NOTHING without a comprehensive robust understanding and plan of risk management.
This is the honest truth. This is the way I trade, it is simple and manages risk completely. We will NEVER EVER blow our accounts if we stick to this
system. (Real traders know about having a robust risk management system because they have ALL BLOWN UP THEIR ACCOUNTS at the beginning. This has happened to ALL the traders I know are now successful.)
Method:
Risk 1% of total portfolio loss on ONE trade. This means if your account is $19999 starting balance and we want to trade say NZDUSD and we want to short it (or buy it) we sell the correct position taking in mind we want to set a safe stop of about 20pips. This website will calculate the size of your position with a 20 pip stop loss. www.myfxbook.com/for...position-size/NZDUSD . So our position is 99950 with a 1% risk loss so a $199 stop at 20 pips away.
Once you are successful on a monthly basis for about 3 months of trading then you can add a second simultaneous trade for a maximum loss of 2%.
If you lose and are stopped out at $199 loss now your starting balance is $19799 and your maximum stop of 1% is NOT $199 but it is $197...Similarly if we would
have made profit we would have raised our risk as we would have our size. Say we make $1000 instead of losing 1% our account is now $20999 and upon our next trade we will risk 1% of that which is $209 AND we will have added to our lot size by the appropriate amount which would be 99995.
This simple method is a winning method, if you follow its simple rules of scaling up if you win and scaling down if you lose you will never blow up your account.
Good luck.
that the price action makes a higher high immediately followed by a correction followed by a higher high, which implies the
bulls can not buy it up higher as every time they do the bears regain temporary control of the price action and correct it.
This back and forth implies weakness on both the bulls and bears. Usually an ascending channel implies weakness and are often
(not always) followed by a correction. Notice that the STOCHASTIC oscillator is buried in overbought for now.
This will be the test that the markets must pass in order to move higher.
Note to technical analysts beginners:
Because we use technical analysis we only trade what we see and we MUST put away our biases if we are to succeed. This is contingent on TRUSTING our
analysis. I hope that I have demonstrated in the short time I have been posting that correct analysis can lead to great rewards, but
we must have a. practice and knowledge of how to use TA b. Be able to TRUST our hypothesis and c. We must acknowledge our biases but
not let them interfere with our analysis. If we are extremely bearish but the charts says that this instrument will be bought up, we must
trust our analysis and check our biases at the door.
Note on correct risk management: Great technical analysis is NOTHING without a comprehensive robust understanding and plan of risk management.
This is the honest truth. This is the way I trade, it is simple and manages risk completely. We will NEVER EVER blow our accounts if we stick to this
system. (Real traders know about having a robust risk management system because they have ALL BLOWN UP THEIR ACCOUNTS at the beginning. This has happened to ALL the traders I know are now successful.)
Method:
Risk 1% of total portfolio loss on ONE trade. This means if your account is $19999 starting balance and we want to trade say NZDUSD and we want to short it (or buy it) we sell the correct position taking in mind we want to set a safe stop of about 20pips. This website will calculate the size of your position with a 20 pip stop loss. www.myfxbook.com/for...position-size/NZDUSD . So our position is 99950 with a 1% risk loss so a $199 stop at 20 pips away.
Once you are successful on a monthly basis for about 3 months of trading then you can add a second simultaneous trade for a maximum loss of 2%.
If you lose and are stopped out at $199 loss now your starting balance is $19799 and your maximum stop of 1% is NOT $199 but it is $197...Similarly if we would
have made profit we would have raised our risk as we would have our size. Say we make $1000 instead of losing 1% our account is now $20999 and upon our next trade we will risk 1% of that which is $209 AND we will have added to our lot size by the appropriate amount which would be 99995.
This simple method is a winning method, if you follow its simple rules of scaling up if you win and scaling down if you lose you will never blow up your account.
Good luck.