In part 2 of this series, we discussed the probability of a coin flip and how the odds that you land on heads "x" number of times in a row significantly decreases each time the coin is flipped. Therefore, it is important to understand the difference between "the probability the chart goes up or down" and "the probability that you (the trader) find yourself in...
A common mistake that traders make after learning any kind of trading setup is jumping into backtesting using a replay tool, or even live trading.
However, if you think about it, trading is very much about pattern recognition. And when you force yourself into live trading without a proper understanding of what your patterns look like, most likely you’ll need much...
-When there is a consolidation happening on a pair, this would be an excellent opportunity to look for a breakout and a reversal of the support/resistance of the consolidation box.
-For these types of setups we need be patient and see how price will move to either the upside or downside.
-Once we see a breakout of the consolidation box then it is essential to wait...
