I am reading the school of pipsology page on “How to read triangle chart patterns” and this phrase came up:
‘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.’
Then,
‘If we set our short order below the bottom of the triangle, we could’ve caught some pips off that dive.’
On the next page the author states,(towards the end)
'To play these chart patterns, you should consider both scenarios (upside or downside breakout) and place one order on top of the formation and another at the bottom of the formation.
If one order gets triggered, you can cancel the other one. Either way, you’d be part of the action.
Double the possibilities, double the fun!’
My question is how can you make money on a downtrend when the value of the base currency goes gets stronger. You lose money, not make it because either you sell at a loss or you’re buying. Unless the author is referring to the single candlestick that appears to hover midway on the downtrend. I am missing something.
When a currency pair [B]declines[/B] in price (what you’re calling a downtrend), the base currency is [B]not[/B] getting stronger — it’s getting [B]weaker[/B] with respect to the quote currency.
When you SHORT the pair (commonly referred to as selling the pair), and then subsequently close that short position at a lower price, you earn a profit.
Yes you can, and profits are either made by shorting or longing a pair . As Clint explained when a pair is in a declination motion the advantage of shorting that pair is up for take .You sell that pair and close it at a lower price and bag the pips the market presents.
Forex market is open on both sides, so we traders can make in uptrend as well as in downtrend! The fact is, we have to understand the trend status first! In downtrend we may only go for SELL and for uptrend it will be BUY. Riding with a pre-breakout trend is always much profitable, it brings quick money within very short time!
I think even uptrend and down trend will possible get profit, whether we often hear if forex has offer two way opportunity even buy and sell currency, if we sell hence will get profit if trend move downtrend and if we buy hence will get profit if trend move to uptrend
If I purchased just when the upgoing white candlestick began and I sold about 6 candlesticks later. I would have gained several pips no question.
On the other hand, there is no CAD/USD that I can tell and shorting the stock. In the following screen, which is USD/CAD, if I purchased around the 15th and sold on the 18th I would have made pips?
I cannot believe I understand candlesticks and indicators no problem, but the most basic principle is skip roping around me.
Can someone post some images for me to understand how to short a stock and make pips on the downtrend?
Yes, as you can trade with up trend and make money. The same way we can work with down trend and get good trades for profits. It is all depend on analysis and how you manage your trade.
In forex market a trader can make money both by selling and buying. So yes its possible to make money on a downtrend. This is the beauty of this market.
