Chart Analysis ~ Breakout with 2 entry points

Breakout with 2 entry points

After the rally from 1.4341 EUR/USD forms a distribution area between 1.4460-1.4533 the first one, and 1.4469-1.4517 the second area. So the major thing here is how we consider the two area. Which one is more critical and which breakout is tradeable  (@1.4517 or @1.4533) ?

For the both setups we have the same tradeable event: rally followed by distribution.

The first one (1.4517)   may seem profitable because of the uptrend which followed (1.4517-1.4597) but has a fast entry point (the ellipse)  and the disadvantage of a possible collapse @1.4533 which fortunately did not manifested.

The second entry (1.4533) is after the breakout occurs and retest it (@ the rectangular figure). This is much better entry point because is a breakout successfully retested but is not followed by a stronger move than previous.

Try to weigh for yourself and have your opinion.


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Posted on June 14, 2010, in Chart Analysis and tagged , , , , , , , , . Bookmark the permalink. Leave a comment.

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