In this section on Trade Diary, we would demonstrate to you some of the trades on our Trading System so that you can learn from them. These are real trades that we have taken. These trades would not only include successful trades that make money, but also failed trades to give you a proper perspective on both sides of the coin.
The following trade on Zinc Mini occurred on 17th of May, 2024. On the previous day, Zinc broke down below a horizontal from a bearish looking structure that resembled a massive Head & Shoulders pattern. However, there was no follow through after the breakdown and the price opened the next day (17th of May) above the horizontal in what looked like a false breakout.
False breakouts and pattern failures are very powerful patterns in technical analysis as they catch a majority of the traders on the wrong side of the trade. As traders scramble to exit their bad positions, the price moves in the opposite direction with a lot of force.
In this example, after opening above the horizontal on the 17th of May, C5 formed a strong green candle above nearby resistance. If you look carefully, C5 also represents a breakout above a small Reverse head & Shoulders pattern that forms within the horizontal channel on 15th, 16th and 17th of May. The weekly and daily trend on Zinc is bullish. So we have strong confirmation here to go long.
The trade proved to be huge! The price action on Zinc after C5 went ballistic never giving a chance to enter again.
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