The author now reminds the reader C. Luca’s principles of work within the expanding triangle:

  • The breaking through the slanted channel level;
  • The target makes 200% after the breaking through the expanding triangle.

Below one can study the technical analysis applied by C. Luca to the world money-market

In order to prove his analytical approach, C. Luca has presented the chart depicting the AUD/USD currency pair movement during 1999.

***Chart The essence of C.Luca’s mistake and his unsolved riddle.  

In this connection, the reader should try to understand where the trading trader can lose his deposit when working according to C.Luca’s technique.

            One should give a good look at (carefully examine) the expanding triangle, submitted in C.Luca’s book.

·  The trader opens a deal at the 4th (?) breaking through the slanted resistance (the three former breakdowns have turned to be false ones).

·  The stop-losses are installed higher than the reverse (inverse) peak by 1-3 points (the peak can be either fractal or zigzag). Thus, the stop-loss snaps into action 3 (!) times.

·  Further more, according to C.Luca’s calculations, it looks like the trader gains 200%-profit when the expanding triangle slanted channel is broken through.

However, what does really happen with the profit?

Actually, the very idea of getting 200%--profit under the condition of breaking through the expanding triangle slanted channel is just a myth. This approach invented by C.Luca can just cause material losses.

The chart of real trades does confirm this statement (AUD/USD, 1999).

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Can the reader see the difference between the chart and the graphs that depict the real trading, taken from point-of sale terminal?

There does occur the breaking through the slanted channel border. However, it could be just false, traders’ orders being “looted” (usurped). This also concerns the traders who open their deals according to C. Luca’s technique. Further, there logically occurs the trend reversal.

The prompts submitted by Masterforex-V Trading System

In order to regularly gain profit at Forex, the reader should try on his own to solve this problem, unsolved by C. Luca. For this purpose, one should do the following.

1.  To investigate the graph that depicts the real trading but not the chart – as C. Luca has done.

2.  The analysis should be given in several timeframes but not only in D1, as C. Luca has done. The aim is to see the role of this expanding triangle in a time frame of a larger-scale.

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Thus, the graphs in larger-scale timeframes (charts W1 and MN) clearly indicate the “bear” trend – within the framework of the corrective waves – a-b-c 4(?) waves.

3.  Here the author of this book would like to remind the reader A. Elder’s thesis – i.e., the expanding triangle “kills” the previous trend.

According to A. Elder, the widening (expanding) triangle is formed when prices form a sequence of increasing maximums and descending minimums. This pattern demonstrates that the market becomes hysterically-instable. “Bulls” and “bears” get all in a fluster. The fight between “bulls” and “bears” becomes too hot – so that the ascending trend cannot go on. The expanding triangle does kill the ascending trend.

4.  Masterforex-V Trading System submits a more precise definition. That is, the expanding triangle testifies

·  The forthcoming end of the previous trend.

·  However, it’s not the trend reversal. In the majority of the cases, it relates to the next to last wave of the previous trend.

Another chapter of this book is dedicated to the obligatory elements of the reversal of any trend - or its continuation.

5.  Hence, it looks rather oddly to open a deal at the “bear” trend ascending correction – in practice, at the very apex – as C. Luca recommends doing it.

6.  By calculations, the reader should on his own try to faultlessly detect the point of opening deals against the trend direction (the trend correction beginning).

  • The previous trend wave end;
  • The confirmation of the correction beginning;
  • The point of the deal opening under the condition of the given correction.

7.  The reader should on his own try to faultlessly determine the point of the deal closing (the correction end) and the technique of the calculations.

8.  The reader should on his own try to find out the points of opening deals on “sell” in the new wave of the “bear” trend. So, what can indicate the end of ascending correction and the beginning of the trend 5th “bear” wave?  

The prompts submitted by Masterforex-V Trading System

The expanded triangle slanted channels play the role of the resistance and support. It is one of means of counting the goals of the currency pair movement target at closing deals – but not their opening as C. Luca recommends to traders.

Let us return to that very expanding triangle (AUD/USD, 1999), submitted in C. Luca’s book. There is an example of the technical analysis applied to a timeframe of a larger scale in the world currency market.

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There is another example: the expanding triangle in AUD/USD pair movement in H4 and D1 timeframes.

The reader should pay attention to the following fact. In November-December, 2006, the expanding triangle has ended with the breaking through the horizontal resistance and the 5th wave at H4.There has occurred the recoil from the slanted resistance border in January, 2007.     

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There is an example of the expanding triangle in D1-timeframe. It is an element of the expanding triangle in H4-timeframe during November-December of 2006.

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There is another prompt. The reader can see the two possible ways of the development of AUD movement on March 18, 2007. It depends on the breaking through (not breaking through) the resistance within 0.7996-0.8006.

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Briefly to say, within the expanding triangle, the levels of slanted resistances and supports are the points of closing deals but not those of their opening – in contrast to C. Luca’s recommendations.

In the case of the trend correction, one can see a reliable example from C. Luka’ s book – AUD/USD pair movement in 1999 (see Chart 2 upwards).  

Now, in contrast to C. Luca’s approach, the reader should on his own try to answer to the questions imposed by Masterforex-V Trading System.

· One should not regard the breaking through the triangle as the true ones (the 4th, 5th, 7th, 9th, etc). Actually, one must distinct the true breaking through the triangle from the false ones.

·  One must tell the trend correction beginning from the moment of its end (the start of the previous trend new wave)

·  The trading trader must learn how to determine goals at the currency pair movement (the trend waves and the correction), the breaking through the triangle included. The reader should look at Luca’s chart again. This graph clearly indicates that the motion targets make not 100% of the triangle size (volume) – in contrast to what Ñ. Luca states. So, how one can otherwise calculate the targets with the accuracy up to several points?

Besides, the reader must himself find the confirmation of the true breaking through the levels – because there are no indicators of the trading volume at the handbook-man market of Forex.   

You can discuss the chapter with the Academy members by following the link

Part I >>

Part II>>

Part III. Giving the wave analysis to trading: the classical approach according to Elliot; the problems and the solutions submitted by Masterforex-V Trading System. >>

Chapter 1. Unsolved "trap of experts" by Larry Williams. >>

Read more

Chapter 3. Unresolved secrets of currency trend reversal by Larry Williams >>
Chapter 4.BASKERWILLE’S DOG as an UNSOLVED ENIGMA, PROPOSED by A. ELDER (the beginning) >>

 

Book 1. The secrets of trading art from a professional trader (or what Bill Williams, E. Naiman and others did not tell traders about Forex) >>

Book 3. Points of opening and closing of positions at the Forex market (basic course) >>

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