China Food shares (LSE:CFC) recently made a false bullish breakout before they were pushed lower. This means that not every trading signal should be taken. Are all snakes edible? Now, this is the technical reason for the next possible direction.
In a context of a downtrend, the price has largely moved sideways this month. Recently it attempted to break above the upper Trendline (which proved to be a false breakout). The price may retry its attempt and close above the upper Trendline, which would lead to the bullish signal verification. Otherwise, it would break the lower Trendline and close below it, leading to the bearish continuation. The RSI period 14 is below the level 50 which means that the bearish continuation is much more likely. You cannot fathom the intensity of the candlestick that appears next - it may even be as big as an arm’s length.
There are no methodologies that bring perfect results always; neither do they give you 100% profitability. Good speculators control the uncertainty and control their open trades.
This article is ended with the quote below:
“One thing is for certain: You will be wrong – a whole lot. Learn to accept it. As long as you cut your losses quick and maintain good risk/reward ratios on your setups you will make money over time.” – Brian Lund (Source: www.tradersonline-mag.com)
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders
No comments:
Post a Comment