Long position - price closes in the green circle or a significiant breakout (entry before closing, more aggresive)
Short position - price closes in the red circle or a significiant breakout (entry before closing, more aggresive)
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There is always supply and demand. And the price is just oscillating between these two zones. The two lines make a pattern. After one pattern gets broken, price sets up the next one. And being able to find it makes your profits. And with enough skills, you can predict the next one, or you can enter the trade before the price goes into your direction. This idea is the example of prediction. And believe me or not - it is the system that always works. And that makes incredible profits.