Go directly to the topic without talking nonsense!
This picture is the 1-hour chart of the euro. Recently, the market has risen almost unilaterally, and finally came out of an M shape on Friday.
So how should we analyze and trade when encountering this form?
Look at this picture first, and those who understand the shape can see an M shape.
After drawing the line, you can clearly see an M. Careful friends should find that this is actually the shape of two ^.
In this ^ shape, those who have read books on candle charts should know that this is actually a shooting star (as shown below)
The meaning shown by the shooting star is a reversal pattern (high point top)
Let's zoom in on the picture
In the same one-hour chart, there are two shooting stars in it, that is to say, the k-line patterns are various combinations .
There is also a confirmation line (pictured below)
The second K-line ratio needs to be lower than the first shooting star (the horizontal yellow line is the lowest point of the first line), otherwise it is not true, that is, every form needs to be confirmed. Confirm the establishment of its form!
If it is confirmed by the third and fourth lines, it means that the shooting line is getting weaker and weaker. As the confirmation line appears longer and longer, it means that the shape has been deformed. At this time, we should stand still.
Well, back to the topic of M-type!
So how should we enter the market when confirming this M shape?
Where should the stop profit and stop loss be set?
But is the middle blue line position the best entry position right now? (Currently, the success rate of entering empty orders is only 60%)
According to my trading mode, I still hold back at the moment, and what I want to wait for is the confirmation of the form. That is to say, the line of shooting needs the next line of confirmation.
My entry position requires a ^ shape to appear within the middle blue line and the top blue line, that is, I have to wait for a ^ shape to be confirmed (a high point), otherwise it is not safe enough. (The success rate of re-entering empty orders after such a confirmation will increase by 30%)
Because this form may also form a W form. (Don't think that the market must be 100%, we just use various rules to analyze, the more rules a market contains, the more stable it will be)
Therefore, we have to wait, wait for the k-line to confirm the line, and wait for the form to confirm the form.
The reason why we are easy to make mistakes is that we did not wait for confirmation, just like when the market reaches the support level and you enter the market to place an order, the risk is indeed too high. If the second confirmation is made, it will be much more secure, just like what we did when we were in school. When filling in the answers to math problems, the meaning of recalculating and confirming is roughly the same.
This time the confirmation line and the confirmation form may be too complicated. In the next article, I will introduce in detail the usage of the confirmation line at various support levels, various resistance levels, various forms, etc.!
Digression~~~
In recent years, many friends have found excuses for their mistakes to escape!
I want to say: Please don't use your complicated thinking to look at the market. What kind of gods and gods are weird, what are the extinction of emotions and desires, and make the transaction a mess.
Yes yes, no no no! If it's okay, it's fine, if it's not, it's not!
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