Have you heard of the "Third Knock Blast Theory" or 3KB? This is a common method used by many traders to trade the market. Based on historical data, it has been constantly proven that support and resistence do not hold on the 3rd test, and a break will most likely occur. Do not get the picture? Look at the chart above, what do you see?
Firstly, a desending triangle. Secondly, the likely 3rd test on the support line. There will be 2 views here. First, some will say a base is forming, buy in support range before the break up. The other will say bearish, warning, a break down is likely. Who is wrong??
Both are right. In this senario, a break down stats is high, but a break up is also possible. Who will want to miss buying at the support region which is usually the best price? Section 47 part 1 of Heiwa Technique says, buy in support region, add when it breaks up. Turn short when it breaks down, add short when the line is tested again after break down.
Understand what the traders are doing? Now you know why some say buy some say sell??
Good. This is called the Third Knock Blast Theory from Heiwa Technique...
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