Post by account_disabled on Mar 9, 2024 21:20:51 GMT -6
Peculiarities of trading on the popular Fakeout-Shakeout pattern Trading within a consolidation pattern is similar to fishing. You wait until a fish bites, gets hooked... Sometimes it escapes. In trading, this situation is called a "false breakout." Sometimes, it is not occasional, it can be organized by a great player. He is well aware of Plankton's desire to open a position at the beginning of the trading range, if the market crowd is not as powerful as it seems, one can make easy profits by catching it. This strategy is most effectively implemented in the Fakeout-Shakeout pattern. The initial condition for pattern formation is consolidation. The longer it lasts, the more likely it is that a currency pair will start trading in a trend.
Then, one of the boundaries of the trading channel is Mexico Mobile Number List broken and the pair quickly returns to the initial position. Once the quotes have moved to the middle of the previous range, the trader will look for an opportunity to enter the market. For example, in the case of the AUD/NZD pair the trading range remained active for almost 1 month, then the bears tried to attack the support level. A fiasco followed by a return to the middle of the consolidation range became evidence of sellers' weakness. The bulls began to look for a signal to open a long position. And they found it. The breakout of the upper limit of the short-term trading range with a subsequent retest made it possible to press the "BUY" button.
A protective stop order is typically placed near the lower boundary of the short- or medium-term consolidation. Using a floating Take-Profit order made it possible to achieve an impressive profit loss ratio. Fakeout-Shakeout Pattern on AUD/NZD 4H Chart Lite Finance: Fakeout-Shakeout Model – An Effective Forex Trading System | Lite finance The more the pair's quotes move, the more serious the trap for sellers is. A typical example is the current situation regarding EUR/USD . Once the currency pair surpassed the limits of the medium-term range of 1.153-1.183, we had no shortage of bearish forecasts. Many banks talked about a level of 1.09-1.1, but the reality turned out to be different. Having allowed the dollar fans to have their fun, the bulls took the lead again.