Hi, newbie here so please be gentle! Please see the screenshot below of USDMXN today. Based on this timeframe, I would have assumed the trend would have continued to rise. This is not however what happened and the price dropped to 19.10500. Could this downwards move have been anticipated?
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My chart and yours don’t exactly agree. Looks like the last candle on your screenshot is 1340. Since 1340, the lowest price I see is 19.14090 at 1355. After that, price has resumed rising and made a highest 19.25490 at 1424.
Drop to 19.105:
Are your charts bid-price or ask price based?
hi 
over what time frame is this?
Hi Tommor, thanks for the reply. i think this is Ask price (at least the “show ask price” is ticked in MetaTrader).
I guess may question is that in hindsight traders could have made a nice profit from the drop (enter with a high sell) and then bought low on the bounce back up. But would it have been possible to spot this move before it happened?
Here’s another downward move (from last week) that I’m struggling to understand how it would have been possible to predict. 
Sure. No, I don’t think these things can ever be pinpointed to happen on a certain day or at a certain time or after a certain price change. But we do know they will happen. After that, its a highly individual question what do you do about it.
For me, if its a strong trend I look to pyramid the initial trade simply on price appreciation, not waiting for new signals. If its not such a strong trend I get out as soon as we get a lower daily high or even a lower daily close: both these are also entry signals and I’m quite happy to get out of a trend this evening and get back in tomorrow morning.
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PS: Every chart I’ve ever seen is based on bid-price. Except line charts which are uncommon these days but are based on mid-price.
Shouldn’t you have shorted when price broke your trend line?
Why is that there?
Would you have done that? I never short into an uptrend, even one that’s starting to retrace. Maybe that’s just me.
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No I would not have because I dont use trend lines for entry or exit signals.
But I dont see why its there then.
If it is not going to be used as a predictor of a potential down move when it breaks…its just for decoration.
That is how he could have (potentially) predicted it.
I agree with that - everything on a chart has to be essential to a decision and it must do something essential that would otherwise be invisible.
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So am I right in thinking this downwards move could not have been predicted but that, because it crossed the trend line, there was a high probability that it would continue to fall before bouncing back up once reaching the lower BB line?
I dont know what your strategy is,
But I wouldn’t say that you are right in thinking this. Your statement is somewhat contradictory.
Contradiction
It may be the case for you, that you could not have predicted it but it doesn’t sound like you were looking for such a set up? Despite drawing the trend line, which failed. Classical TA suggests that this could have been a shorting opportunity and it seems that you also believe that there is a high probability it would have continued to fall. It did not enter your awareness because you were focusing on other things.
other traders might have seen that double top,
others might have seen the break of your trend line and taken it short.
a combination of both to take the short.
other traders might be looking at other indicators that you are not looking at.
You might be a trend follower, but others trade mean reversion and are contrarian.
I bet someone made money from that move.
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Re-reading my reply, I can see the contradiction. I was wondering if there was a way to predict this fall well in advance (e.g. based on the patterns over the last hour - like the double top). I didn’t trade here and I put the trend line on simply for the perpose of this thread.
I’m simply looking back at USDMXN moves and trying to spot potential patterns.
If I had been trading at this point, I would have gone for a sell as the upper BB line was broken (backed by a high Williams %). This however this technique isn’t always reliable.
You can’t be certain what the market will do on a given date. But as long as you have a plan, you don’t need to be - you just wait for what you would like to see and then follow the plan.
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It might have been a good indication to take profits if you were already long but not necessarily to take a short position.
Find a set up that you believe in and is reliable
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Another thing,
That indicator at the bottom of your chart is also diverging with the price.
Price is making higher highs (the third high is equal with the second high) but the indicator is making lower highs.
That can be seen as a warning that the rally is running out of steam…
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