Quote:
Originally Posted by tradingfx
I read this in a book in a book I bought. The information italics is the confusing part
When the market breaks the uptrend line and enters into a sell zone (below the trend line), always take time to check the angle of the trend line. The backside of the uptrend line will now act as resistance. Should the market begin to rally again, it will need to break through the backside of that trend line or the resistance. If the backside of the trend line is lower than the last high, there is an 80% chance of a continued dip and a trend reversal. If the backside of the trend line is higher than the last high, there is an 80% chance of a continued rally.
I'm new to forex trading (less than 30 days) and this forum any help would be great!
|
When the price breaks the up trendline, that trendline now becomes a resistance line.
Now, depending on some other simple technical analysis factors (angle of penetration and position of the last high), that break could lead to a reversal or a continuation of the trend.
More details about the probability of a reversal/continuation of the trend after a breakout here :
Fast Break Plus - from FutureSource.com
