how do you know retracement wouldn't be a false positive and price keep jump up and break 1.47203?
11021992
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There is no way to be sure, but price has tendencies to move in certain ways. Most breakouts are followed by a retest. Some of them move so fast, that they don't even make it to the retest. Other times the structure gets broken again to the upside.
We can't win them all. It's about picking the right R:RR combined with win ratio.
In the chart we see price forming new lower highs, while the lows remain at the same value [inside the wick formed in late 2015], meaning that sellers are usually in control.
lkthomas
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So basically join in the trade when retracement happen should be a standard trading plan, correct?
11021992
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For me it is, yes. And for many other people.
It is one of the easiest trading methods. Very easy to spot, good win ratio and good risk:reward ratio. No need to make things complicated.
lkthomas
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how exact do you place order above/below trend line? 10 pips behind or what?
11021992
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The lines on the chart are just arrows indicating expected price action, not actual trendlines.
My stop is placed above the grey structure bar. The entry is just below the grey structure bar.
Total stop loss is 270 pips, which is pretty big. However, it's a long term trade.
If you have any more questions, please send me a personal message :).