Pattern «Folding Meter»
Pattern «Folding meter» is sometimes also called «3-stage trend line» — a very simple strategy of forex trading (forex model), which is used on virtually any currency pair and is suitable for absolutely all time intervals. This model is a signal of trend reversal, so it is necessary that it formed before taking any action.
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When trading forex, fans of «catch» the big trend is very often necessary to wait for the moment a trend reversal, but it is sometimes not as there is no … And then when you just briefly distracted — and he, as it turns out, was right there, this is the trend reversal. Only manages his words, but sometimes it is too late to enter the market. Because movement through a third trend line is so fast that sometimes it is just not catching up.
But oddly enough, identifying patterns of data breaches, has been found a very simple geometrical structure (pattern), which was not mentioned in any of the books on technical analysis (graphical analysis). So she was called — «folding rule» (folding rule).
Using this pattern of «folding rule» - you can enter the market in the early stages of a trend reversal.
And so to enter the market to sell (short position) on the pattern of the «folding rule» should be:
1) We provide a trend line (T1) on the grounds of 2 with respect to the newly formed basins (area support).
3) The final stage of the model — when the market starts to pick up speed and it is often the movement of exhaustion, and then we build a third trend line (T3). This movement has the same characteristics as the line T2.
After all these constructions — you can clearly say that we are willing to trade.
When the trend line was broken T3 price - we are entering the market, opening up a trading position for sale at the break of the trendline and the closing prices of the candles below this trendline. Our safety stop order should be placed above the largest peak — the top of the upward movement. After that you should set a goal to achieve a profit — and this goal will be to the trend line (T1).
You may be amazed at how often the support is formed exactly on the trend line (T1). But after we closed the deal with the return on a trend line (T1), we still observe what’s going on at the foreign exchange market. If the market still finds support for this trend line and begins to rise again, then we can wait until it has another opportunity to sign a short trading positions. If the price the market will continue to fall through the trend line (T1), then the signal is strong enough indication that all the previous trend has a tendency to completely turn around, and we should consider re-enter the trading positions.
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