I wanted to discuss and show today a powerful example of what exactly we define as a “Power Trend”. Profit Edge Trading plays these powerful setups in the market when they occur, and through our analysis and methodology we enjoy having an Edge to trading these occurrences. On average the Forex currency market trends much more in some instances and much longer than other trading markets, because of the massive money flows each day. On average about 45 – 55% of the time currencies are trending, and the rest of the time they are in a resting or consolidation period.
Here we have a picture of the USD/CAD (US Dollar/Canadian Dollar) pair shown above. This pair in the recent past was in a large weekly uptrend consolidation and broke out to the upside of that consolidation. This is a 15 minute chart of the pair showing the most recent price action over the last 3 days. Profit Edge Trading got into this trade with good timing, and we are currently still in this trade. If you look closely at the chart, there was an initial Bullish Engulfing configuration at the hourly consolidation, and a follow-through gap to the upside gave confirmation to the trade. Power Trends occur most often at pivotal breakouts out of long term consolidation periods. Profit Edge Trading likes to use the 34 Period EMA as part of our methodology as an intermediate term trend filter to see where the price action finds major support & resistance. As you can see, price likes to bounce and come back to the 34 EMA a majority of the time during the duration of a Power Trend. A Power Trend must also include a greater degree of slope in the moving averages, the greater the angle, the more powerful the Trend becomes in most cases. We like to see an angle of 30 degrees or greater in the position of the EMA’s. It shows that there is relative strength and momentum behind the price action. Power TRENDS Truly are a Traders Best Friend!
The Profit Edge Trading Methodology includes much more than what was discussed in this article. I show all of our P.E.T members the Proper use of Candlestick reading, Pivot Point usage, Fibonacci and the use of EMA’s, and Basic Indicators in the trading method.
If you are interested in learning and trading along with me under a Profit Edge Trading membership, I will be disclosing details on how you can join in the future. I will continue posting trading results each week to show the validity of the Profit Edge Trading Methodology.
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Profit Edge Trading
CTTO – Chief Technical Trading Officer