Hello traders, the Dow is rallying and everyone is fueled with euphoria.We all know what goes up must retrace back down :).
Let me give you a introduction what these lines mean: The upper band which i have added is derived from a fib confluence zone as an area of resistance, it also happens to be the upper band of the channel. Its significant because we use it is an important level for the market. The lower band is our support. Pay close attention to the MA in the next couple of days. If the trend is strong we will have a minor pullback, similar to this chart(marked by arrows). If the market gets shaken up by poor earnings we can fall to the lower band and while staying in the channel before going lower. The ultimate strategy is to monitor the strength of the trend. Set your stop loss above the upper band if you see the trend is getting weaker. Set your stop loss at the lower band if you see a strong trend. Happy trending traders.
Let me give you a introduction what these lines mean: The upper band which i have added is derived from a fib confluence zone as an area of resistance, it also happens to be the upper band of the channel. Its significant because we use it is an important level for the market. The lower band is our support. Pay close attention to the MA in the next couple of days. If the trend is strong we will have a minor pullback, similar to this chart(marked by arrows). If the market gets shaken up by poor earnings we can fall to the lower band and while staying in the channel before going lower. The ultimate strategy is to monitor the strength of the trend. Set your stop loss above the upper band if you see the trend is getting weaker. Set your stop loss at the lower band if you see a strong trend. Happy trending traders.