The Way of Investment (Part 10)

The Path to Investment Mastery (Part10)

1.      Next, we will examine the convergence period.

Looking at the overall wave movement,Around 2021Year3Monthto2021Year7to

1.      SellYearMonthDayYearMonth

Graph falls from positive territory and is held as a short position until it reverses in the negative territory.

The chart is daily chart. The lower half shows the “8 CP Visualization Indicator,” and the green bold line corresponds to

In this case, the drawdown due to the upper wick was. Since a stop loss was set at the most recent high, it hit the stop and became a losing trade. If the stop loss had not been hit, the trade would have had a risk-reward ratio of. It’s disappointing. Trades can lose, so loss should be accepted. The goal is to win overall.

If one insists on a comeback, use a lower time frame, i.e.,4hour chart to draw a counter-trend line. In the daily chart context, we judge a downward trend (convergence period), so wait for the trend line to be broken.

The above figure showsAUDJPY on a4hour chart. Draw a purple trend line, and when it breaks, enter short. In this case, set the stop loss at the most recent high. The lower half is the “visible indicator,” which also sits at exactly the same position, and's chart is crossing below the zero line.

When the graph of the “visible indicator” turns upward in the negative region, we close the position. The previous loss was recovered, yielding profit.