It’s Not Perfect But It Won’t Kill You
The coffee market is an example of how this approach resulted in a small loss (see Figure 19.6). Coffee had been in a down channel since April 1995 (not shown) and finally broke out in January 1996. It moved higher and then settled into a triangle consolidation pattern. A strong momentum indicator (also not shown), plus an unrealized target of 155 based on a projection from the channel, suggested a continuation of the rally.
Buying at the close on February 23 was a low-risk way to take a position before the inevitable breakout from the triangle. When the market ...
Get Technical Analysis Plain and Simple: Charting the Markets in Your Language, Second Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
