Confusion about Grade 7

[soul]

I am new to all this and that's why I'm taking your classes, however I'm a bit confused and can't seem to find the answer. In grade 7 it says regarding symmetrical triangles:

"We can place entry orders above the slope of the lower highs and below the slope of the higher lows. Since we already know that the price is going to break out, we can just hitch a ride in whatever direction the market moves."

There is only explanation as to what happens if the market moves up but what happens when the market moves down? Even if you placed an order below the higher low and gets filled, wouldn't you lose since the market will go down further?
I have the same question about the ascending triangles.
Can you please clearly explain how one can benefit in the other situation as well i.e. when the market moves down?

thanks

[In2Blues]

Originally Posted by soul

I am new to all this and that's why I'm taking your classes, however I'm a bit confused and can't seem to find the answer. In grade 7 it says regarding symmetrical triangles:

"We can place entry orders above the slope of the lower highs and below the slope of the higher lows. Since we already know that the price is going to break out, we can just hitch a ride in whatever direction the market moves."

There is only explanation as to what happens if the market moves up but what happens when the market moves down? Even if you placed an order below the higher low and gets filled, wouldn't you lose since the market will go down further?
I have the same question about the ascending triangles.
Can you please clearly explain how one can benefit in the other situation as well i.e. when the market moves down?

thanks

You would place a Buy Stop order above the lower highs and a Sell Stop order below the higher lows.

The image below their explanation shows what would happen if the price goes up. The opposite would occur if the price goes down.

For example, if the market moves up, then your Buy Stop order would be executed. Once the price goes up to your Target Profit, you would sell.

If the market moves down, then your Sell Stop order would be executed. Once the prices goes down to your Target Profit, you would buy.

Once one of your Stop orders is executed, you cancel the other one (unless it's set to expire automatically).

Either way, you make money.

[soul]

Thanks for the answer.

Another question. forgive me if it sounds stupid:

If I sell when the market is moving down, do I have to buy in my next order?
I may sound confused, but honestly, so far babypips has not clearly explained the concept of going long or short in the previous lessons. So far I have learnt on my own that I can sell a currency that I do not own i.e. going short and I think that's how I can make a profit by selling first and then buying later when the market goes down in the previous question that we discussed. Right?
Do I have to buy after I go short i.e does my following order have to be "long" if I go "short" first?

Thanks



Thanks

[daydreamer65]

Originally Posted by soul

Thanks for the answer.

Another question. forgive me if it sounds stupid:

If I sell when the market is moving down, do I have to buy in my next order?
I may sound confused, but honestly, so far babypips has not clearly explained the concept of going long or short in the previous lessons. So far I have learnt on my own that I can sell a currency that I do not own i.e. going short and I think that's how I can make a profit by selling first and then buying later when the market goes down in the previous question that we discussed. Right?
Do I have to buy after I go short i.e does my following order have to be "long" if I go "short" first?

Thanks



Thanks

I would say the best thing to do is open a demo account,
there are many about which are free & unlimited.

Then try each method out, because different platforms operate
differently.

But the basic idea is that when you have selected a sell order, you
can either cancel it manually, by just pressing stop, or you can put
a buy order in, for the same amount of lots or units, this will then
cancel the sell order.

Or you would set a Take Profit (T/P) & a Stop Loss (S/L) when
you set up the trade then which ever way the trade goes the order
will execute when you reach the required limit.

But as I initially stated it is best for you to practise all these different
methods on a demo platform, make mistakes, watch what happens
when it goes wrong, you cannot lose anything, in demo it's only a game.

Get to know your platform of choice inside out & upside down.

[In2Blues]

Originally Posted by soul

So far I have learnt on my own that I can sell a currency that I do not own i.e. going short and I think that's how I can make a profit by selling first and then buying later when the market goes down in the previous question that we discussed. Right?

Right

Originally Posted by soul

Do I have to buy after I go short i.e does my following order have to be "long" if I go "short" first?

Daydreamer pretty much answered this but, just to clarify:

If you go short (sell currency first), then you would close your current position when the price goes down to the level where you want to take your profit.

This is not the same as opening another position (placing another order).

With most brokers, buying will cancel a short position but, with some brokers, buying will open another long position and leave your short position open! You don't want to do that.

So, the proper way to do it is to close your current position.

Your next order can be whatever you want. There are no restrictions just because you shorted the previous order.