Breaking Out

Good Morning Dynamic Traders

We have finally broken the back of this week, with the weekend drawing closer.

Yesterday we started to follow a new currency and we saw how we could have made money from the downtrend. Yesterday price broke and closed outside of the channel and we have another bullish flag forming outside the channel. Does this mean that the downtrend has ended? It is still too early to know yet, but let’s have a closer look at the recent events so far.

The last time price hit the bottom trend line of the channel, we had clear convergence from the MACD. You will also notice that price hit the trend line at a RN and where the VI was. With these 4 confluences of events this might have been enough to enter a long position, but this is also dependent with the rules in your trading plan. With price hitting the top trend line of the channel 5 times prior to yesterday, you couldn’t be blamed for thinking that’s where price would be heading. As price has now broken out of the channel and above the trend line you should still be in a long position if you had taken the trade earlier.













All 3 studies at the bottom of the chart are supporting the theory that price will increase.

So what do you think will happen?

Happy Trading

Richard Monnery