Three-Line Break Study on Peso
Trading Techniques with the Three-Line Break Chart
Some traders prefer waiting for an extra confirmation of a trend reversal. Depending on your risk, you can follow rules below to confirm a bullish trend or bearish trend. The idea of waiting for extra confirmation would involve a tradeoff between risk and reward. The longer a trader waits for a confirmation of a trend reversal, the greater the likelihood of being correct, but the lower the profit potential since more of the new trend had already started.
Bullish turnaround signals for traders...
Two-Line Break- Must exceed the high of two consecutive black (red) lines
Three-Line Break- Must exceed the high of three consecutive black (red) lines
Four-Line Break- Must exceed the high of four consecutive black (red) lines
Bearish turnaround signals for traders...
Two-Line Break- Must exceed the low of two consecutive white (green) lines
Three-Line Break- Must exceed the low of two consecutive white (green) lines
Four-Line Break- Must exceed the low of two consecutive white (green) lines
Line Break Patterns to look for
Black Shoe - White Suit - Neck = Bullish signal
Black Shoe - Black Suit - Neck = Bearish Signal
Record Sessions
When there are 8-10+ consecutive lines (black, white) without two consecutive opposite lines, there is a high probability of a trend change. 8-10+ white (green) lines is considered overextended to the upside. 8-10+ black (red) lines is considered overextended to the downside.
You can also find patterns such as head and shoulders, double tops, wedges, triangles using line breaks charts, as well as find trend lines such as support/resistance.
*Note: Missed 6 on that last text overextended to the upside. That should also possibly play a role in the magnitude of what looks like a peso correction.
Some traders prefer waiting for an extra confirmation of a trend reversal. Depending on your risk, you can follow rules below to confirm a bullish trend or bearish trend. The idea of waiting for extra confirmation would involve a tradeoff between risk and reward. The longer a trader waits for a confirmation of a trend reversal, the greater the likelihood of being correct, but the lower the profit potential since more of the new trend had already started.
Bullish turnaround signals for traders...
Two-Line Break- Must exceed the high of two consecutive black (red) lines
Three-Line Break- Must exceed the high of three consecutive black (red) lines
Four-Line Break- Must exceed the high of four consecutive black (red) lines
Bearish turnaround signals for traders...
Two-Line Break- Must exceed the low of two consecutive white (green) lines
Three-Line Break- Must exceed the low of two consecutive white (green) lines
Four-Line Break- Must exceed the low of two consecutive white (green) lines
Line Break Patterns to look for
Black Shoe - White Suit - Neck = Bullish signal
Black Shoe - Black Suit - Neck = Bearish Signal
Record Sessions
When there are 8-10+ consecutive lines (black, white) without two consecutive opposite lines, there is a high probability of a trend change. 8-10+ white (green) lines is considered overextended to the upside. 8-10+ black (red) lines is considered overextended to the downside.
You can also find patterns such as head and shoulders, double tops, wedges, triangles using line breaks charts, as well as find trend lines such as support/resistance.
*Note: Missed 6 on that last text overextended to the upside. That should also possibly play a role in the magnitude of what looks like a peso correction.
Disclaimer
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