- Spotting the highs and lows is the most important basic analysis approach, which will make you able to identify the ongoing trend
- If you spotted the series, you should expect that this series of Higher highs & Higher lows or Lower highs & Lower Lows will continue. WHERE a break of this series is the first and most important signal of a trend reversal.
- Trading in the direction of the trend as you can clearly see on chart would have been very profitable if timed properly. If you have in mind that the price is making higher highs and higher lows, you will adjust to that, looking for downside pullbacks to find a potential entry point.
e.g. Two great entry points were provided by price action. The first was in September 2012. where price was testing the previous HL. According to the HH&HL Rule, that low should remain intact for the trend to remain bullish. Therefore, a long position should be initiated there. That entry area has the greatest risk-reward possible, because stop loss would obviously be below the latest HL.
Another example where the price was in a similar position, was in in may 2014.
One more great bullish signal was the retest of the previous HH in october 2014, where the price formed a hammer candle.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Be one of the first members of my new trading portal, check my new website thefxchannel.com/ , vote and subscribe. Thank you
Good luck, keep your stops tight..
twitter.com/thefxchannel
www.facebook.com/thefxchannel
plus.google.com/+Thefxchannel0
My best regards
Technician