In today’s lesson, we are going to demonstrate an example of a chart where the price gets caught within two horizontal levels and makes a bullish breakout. We try to find out what it has to offer and how the price action goes. Let us get started.
The price makes a strong bullish move. Upon finding its resistance, it is in a bearish correction. The buyers may eagerly wait to go long in a chart like this if the chart makes a breakout at the last highest high. The last two candles come out as bullish candles. It seems that the price may have found its support.
The chart shows that two lines may be drawn by using significant levels, where the price reacts several times. The buyers may eye on the price and hope that the chart makes a breakout at the level of resistance to offer them a long entry.
The chart shows that it does not make a breakout at the highest high. However, it gets rejection and makes another bearish move towards the level of support. Here is an interesting thing. The sellers may wait for the chart to make a breakout and offer them a short entry here since the level is a double top resistance.
The chart does not make a breakout, but it produces a long bullish engulfing candle. It gets rejected again and heads towards the South. Upon having a bounce, it heads towards the North. Two horizontal levels may be drawn, which is called horizontal channel or box channel. The price may go either way. Now, the buyers are to wait for a bullish breakout and go long in the pair.
After a long while, the chart makes a bullish breakout. The buyers may wait for the price to make a correction/consolidate and produce a bullish reversal candle to offer them a long entry.
The price makes a bearish correction and seems to have found its support. It produces a doji candle. The buyers may get ready to trigger a long entry. Some buyers may flip over to the smaller chart to trigger a long entry, and some may go long above the last highest high. Some may wait for a bullish engulfing candle closing above resistance. It depends on their trading strategy.
The chart produces a bullish engulfing candle closing above consolidation resistance. The price may head towards the North with good bullish momentum as far as the last candle’s attributes are concerned.
The price heads towards the North and hits 1R within the next candle. The last candle comes out as a bearish inside bar. It suggests that the price may consolidate and make a bearish correction. In the end, the buyers have made some green pips.
The market ranges most of the time. When it makes a breakout, it does not take too long to offer an entry. In today’s lesson, we have seen that the price makes us wait for a long. It takes a long time to make a breakout. Traders must keep their eyes on such charts and wait for the price to take a direction. In the end, even a choppy chart may end up offering a good entry too.