diagonal support and resistance
In the financial market, we can frequently observe country price patterns. Diagonal support and resistance are typical price patterns that we can observe as results of the combined effect of the equilibrium process and the fractal wave. Diagonal support and resistance are no different from horizontal support and resistance. When connected tops and troughs provide the diagonal slope rather than the horizontal line, then that slope can be considered as the diagonal support and resistance. However, there can be more differences compared to the horizontal case. First, we can get the bullish diagonal support and resistance. Second, we can also get the bearish diagonal support and resistance. For your convenience, we have listed all possible diagonal support and resistance patterns in Table 2-2. We have also included the corresponding example for each pattern from Figure 2-6 to Figure 2-13. How to trade diagonal support and resistance levels are the same as horizontal support and resistance levels. You can apply the Relative Threshold Method and the Fibonacci Limit Method to your entry in the case of Diagonal Support and Resistance as well. An example of trading is shown in Figure 2-14. How to calculate the threshold level for Y Buy and Y Sell similar to the horizontal support and resistance case. As with horizontal support and resistance, it makes sense to set the stop loss level higher than the minimum stop level.
About this article
This article is the portion taken from the draft version of the book: The Scientific Guide to Price Action and Pattern Trading (Trend Wisdom, Cycle, and Fractal Wave). The full version of the book can be found from the link below:
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