DAX IndexShort
DAX is showing a dangerous pattern
Updated
‼️DAX is showing a dangerous pattern
The german index,DAX has been in a strong bull market for a long timet, but recently we had a confirmation of a RISING WEDGE PATTERN (in blue).
✅ What does a RISING WEDGE PATTERN imply?
Rising wedges are usually formed at the end of trends and when the price breaks below the blue support trendline, a fast decline happens.
The fundamentals in germany are quite bad, and if there is no response from Europe, we could see a dangerous fall in the german index.
Sometimes rising wedges break up, BUT this only happens in extremly greedy situations, like the tops in NASDAQ:TSLA.
If there is an upper break, means that we are facing the LAST rally, so again a brutal falldown is likely to occur.
💰 How to trade this chart pattern?
You should wait for the break of the blue trendline to short the market and search for a fast but very profitable trade.
I do not recommend trading it if the break occurs on the opposite side, because panic moments are much more profitable with less risk.
🛡️ The risk management strategy
As we have done in so many previous ideas, remember you can split the position in 2.
- 50% of the position in a take profits as large as your stop loss (adapt SL and this 1st TP to local supports/resistance levels). In this case, a 2% will be ok.
- 50% of the position to a price as large as the previous pattern, which would mean a profit of 15 to 20%. Anyway, to increase our chances to arrive to the second TP, we recommend using a 10% take profits.
The second TP is less likely to happen, but as soon as the first one has been reached (extremely high probability), this becomes a RISK-FREE TRADE.
✴️ ENJOY AND FOLLOW for more 😊
The german index,
DAX has been in a strong bull market for a long timet, but recently we had a confirmation of a RISING WEDGE PATTERN (in blue).✅ What does a RISING WEDGE PATTERN imply?
Rising wedges are usually formed at the end of trends and when the price breaks below the blue support trendline, a fast decline happens.
The fundamentals in germany are quite bad, and if there is no response from Europe, we could see a dangerous fall in the german index.
Sometimes rising wedges break up, BUT this only happens in extremly greedy situations, like the tops in NASDAQ:TSLA.
If there is an upper break, means that we are facing the LAST rally, so again a brutal falldown is likely to occur.
💰 How to trade this chart pattern?
You should wait for the break of the blue trendline to short the market and search for a fast but very profitable trade.
I do not recommend trading it if the break occurs on the opposite side, because panic moments are much more profitable with less risk.
🛡️ The risk management strategy
As we have done in so many previous ideas, remember you can split the position in 2.
- 50% of the position in a take profits as large as your stop loss (adapt SL and this 1st TP to local supports/resistance levels). In this case, a 2% will be ok.
- 50% of the position to a price as large as the previous pattern, which would mean a profit of 15 to 20%. Anyway, to increase our chances to arrive to the second TP, we recommend using a 10% take profits.
The second TP is less likely to happen, but as soon as the first one has been reached (extremely high probability), this becomes a RISK-FREE TRADE.
✴️ ENJOY AND FOLLOW for more 😊
Note
DAX seems ready to do all time highs, moving the price to the green zone (bull continuation), so keep dancing for now :DTrade active
The bull market target price was reached and the price has rallied as expected. We are now approaching the upper blue trendline of the rising wedge which could be a resistance level.Trade closed: target reached
Amazing how the price is now respecting the upper blue line of the wedge. DAX should move sideways now.
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