Yep if it was easy then everyone would be rich;-)

Here is another potential pattern on the first chart:


Any time you consider placing a trade my opinion is that you should always look at things from both sides of the equation. So with this in mind think about the second chart and what are some things that you see on that chart which if you had to argue that the market was going to go lower you would point out?

Dave

OK DAVE I GIVE UP

WHAT OTHER PATTERN DO YOU SEE, AND WHY ARE YOU SKEPTICAL ABOUT GOING LONG ON THE SECOND CHART. I APPRECIATE THE DIALOG
SCOTT

Hey Scott,

I posted the other pattern in the post above the one you just did its a triangle pattern as you can see in the chart there.

Not going to make the other one that easy for you. You need to be able to look at any chart and always make an argument either way. Doesn't have to be scientific just look at the chart and if you still don't see anything go through module one on the Free Course Page again and then come back to me.

Dave

OK HERE GOES...IN THE SYMBOL MTRX IT LOOKS LIKE A TRIANGLE MIGHT BE FORMING

IT LOOKS LIKE SINCE THE 1ST OF THE YEAR IT HAS MADE LOWER HIGHS AND HIGHER LOWS..SO DEPENDING ON THE BREAKOUT IT MIGHT GO EITHER WAY...IS THAT RIGHT??

SCOTT

For most things when looking at a chart its part science and part art so I don't think there is really any right or wrong but rather bias in one direction or another.

I can see the triangle there however if it breaks the top of the flag then it will be breaking the top of the triangle as well so this piece of analysis would in general give a bias towards the upside.

I try to always look at the whole picture here however and so my reasoning would be in the part of your answer where you say "it has made lower highs" and I would say lower not higher lows for the last several months so I would not be convinced that I was trading with the tide here if I went long as the tide still seems to be lower to me.

Like I say however that is just a bias it could take off and go to the moon from here so make your own decisions that is just one traders thoughts on the chart.

Best Regards,
Dave

When checking out the different time frames to see how the trends are going before making a trade: let's say looking today April 8 2008 at the charts of the USD /JPY on the daily and weekly. Overall the trend has been down, however the last few candles on each have been bullish; do we determine the trend by the last few candles or the overall trend?

Thanks,
Jay

Hi Jay,

Good question. I think most traders would agree that the trends is defined by the full picture so more than just the last few candles. With this being said however there can be multiple trends for example a long term trend which may be defined by the weekly or daily chart, an intermediate term trend which may be defined by a daily or 4 hour chart, and then a shorter term trend which may be defined by and hourly or lower time frame chart. For more on this check out our lesson on multi time frame analysis here.

Best Regards,
Dave

even though the overall trend is down, the daily chart USD / JPY now seems to be showing a bull flag. correct?

Is it a good sign for a break being that the last couple of weekly candles are now bullish or does it just seem to be a retracement?

Thanks,
Jay

Hey Jay,

Yes I think most would agree that this chart is showing a bull flag. I don't know if you can say if it is a good sign or a bad sign from the last few candles though. After spotting a flag like this the next thing that I think many would look for is what the resistance levels are like above the flag. Maybe starting with the longer and shorter term trendlines and then working from there.

Any thoughts on that?

Best Regards,
Dave

with that doji like candle I am not sure; has this actually turned into a bull pennant rather than a flag? Thanks!