This is the kind of setup I like….in fact, this setup is so perfect and pretty I can not stop watching it. Because of that I would like to use this setup to illustrate my kind of trading in this first post.
These are also the kind of setups that bring in the biggest profits. My two most important rules in finding these setups:
- They are “In your face”
You see the setup immediately. You do not have to search for the setup because it is so clear and present that you can not miss it. If you find yourself searching for a setup on a chart; it’s not there!!!!
Do not keep searching for a setup and end up imagining one.
- They are “Pretty”
There is no noise. The setup is clean and nearly textbook.
The only negative point I can find is that I usually look for patterns on the weekly timeframe and trade them on the daily timeframe.
The CADJPY carved out a double bottom on the daily timeframe, a clear break of the neckline, retest and then took off. Price went up and up and delivered a very nice profit. At the time of this writing price is still traveling north…. If you zoom out to the weekly you may even see that big fat triangle waiting for a breakout to bring price even more North…..