A key part of technical analysis is to
identify the different phases and patterns
in the market.
×
So, what can we see?
- We can see that we're within a major
ascending parallel channel and price has
been respecting it. When price
approaches either extremes of the
channel, it rejects aggressively.
- There are 2 key phases at play here. The
blue phase is the impulse and the red
phase is the correction.
- The impulse phase is an upward
movement and the corrective phase is a
downward move
After identifying these phases, what
next?
- So now that we know that the impulse
phase ends at the upper limit of the
channel, we know there's a corrective
move coming back down to the channel
support.
- If there's enough momentum, we can
X
break the channel support and keep
falling. As we're in an ascending channel,
it is often a reversal pattern = there's a
high chance that CHFJPY can come back
down all the way to 109
- Now we need a trading plan to enter this
trade
How do we trade it?
- The risk entry would have been at the
rejection of the channel resistance
- The safe entry would be to identify when
the impulse has ended. One way we can
do this is by identifying when the uptrend
has ended. This can be done by using a
trendline (like the one we have) and
watching for a break to indicate that the
uptrend has ended and the next phase has
begun.
Trade Idea:
Watch for the ascending red trendline to
break and enter with stops above the
channel.
First Target: Target the channel support
for first targets (500pips)
Second Target: The bottom of the channel
(1,600 pips)
identify the different phases and patterns
in the market.
×
So, what can we see?
- We can see that we're within a major
ascending parallel channel and price has
been respecting it. When price
approaches either extremes of the
channel, it rejects aggressively.
- There are 2 key phases at play here. The
blue phase is the impulse and the red
phase is the correction.
- The impulse phase is an upward
movement and the corrective phase is a
downward move
After identifying these phases, what
next?
- So now that we know that the impulse
phase ends at the upper limit of the
channel, we know there's a corrective
move coming back down to the channel
support.
- If there's enough momentum, we can
X
break the channel support and keep
falling. As we're in an ascending channel,
it is often a reversal pattern = there's a
high chance that CHFJPY can come back
down all the way to 109
- Now we need a trading plan to enter this
trade
How do we trade it?
- The risk entry would have been at the
rejection of the channel resistance
- The safe entry would be to identify when
the impulse has ended. One way we can
do this is by identifying when the uptrend
has ended. This can be done by using a
trendline (like the one we have) and
watching for a break to indicate that the
uptrend has ended and the next phase has
begun.
Trade Idea:
Watch for the ascending red trendline to
break and enter with stops above the
channel.
First Target: Target the channel support
for first targets (500pips)
Second Target: The bottom of the channel
(1,600 pips)
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.