What we can do now is start to get a game plan. If the market gets down here, what can we anticipate? We can anticipate a pretty big break. If the market gets above here, we can anticipate a pretty big break to the upside. Let me clean this up a little bit.
Our first point is watching this low and this high as the market trades into; what is this again, another pen formation. So whenever the market is going to break, we can anticipate a break and have a game plan for much lower prices if it does manage to break out.
Now we are going to go down to a daily bar. I am going to expand this just a little bit. Now is where we can start to see the patterns come into play here.
There’s the top of the flag. There’s the bottom of the flag. Here’s the pole. Okay?
Once we drill in now; we are looking at the daily bar. We can see an overall pattern. An overall pattern is the flag. The flag, now that I am filling it in, is shaped like well, an American flag if you will. So there you go. I know it is pretty sloppy but you can hopefully see the whole outline there.
Once we’ve got the overall, long term plan, now is when we want to go in and the reason why we are looking for these patterns is because we want to verify that the professional money are making decisions where we think and where we are planning.
Now as we have zoomed in here, we have got more lines. This line and this line; the top line is from January of 2007. This line here is from December 2006. These are going to be decision points for the market so we’re going to want to keep them in mind.
What are we planning for? We are planning that the market is going to move into a consolidation right into the support zone. What does that mean? What it means is that we should see some repeatable patterns as we start to drill down now. As we start to drill down, now we are looking at a four hour bar.
As we drill down, what we are going to focus in on are the areas; this line here. If you remember was from our flag pattern. So we are going to be looking to see; do we see market pattern up here. If we do see a market pattern, we can use that area to make a decision so we can write up a trading plan if the market gets up to this area and I see a breakout. This is where you can fill in the information from the course. I see a particular market pattern, and then I can make a trade. This is what I talked about in the course, if then, market planning.
Mac X is recognized as a forex expert trainer, forex trader and author of three best-selling forex trading books and Home Study Courses including "How To Get Filthy Stinking Rich Trading The Forex" book and Home Study, "How To Trade The Harmonics of The Foreign Exchange Markets". Mac X has trained over 1,300 students in large forex seminars, one-on-one and small groups. Read Mac's Forex Blog for more
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