All charts have 2 phrases, the Trending and Consolidation phrase. Trending is when the market only seems to be moving in one direction, while in the Consolidation phrase, the market is calmer and settled. It is just drifting up and down in a zone (Support and Resistant), not knowing where to go.
But sooner or later, it will breakout into a Trending phrase again. Just like when Japanese PM Shinzo Abe announced that he wants to devalue the Yen. The Consolidation phrase no longer becomes confused and know what direction it wants to go. You can see the chart below. The blue box is the period of Consolidation.
So, what is the 'Last Kiss'? I like the strategy firstly because it is the title of a Pearl Jam song. Very nice lyrics~ They are not the original song writers, but they are one of my favorite bands.
But what about in terms of Forex?
When there finally a breakout from a Consolidation phrase, the author mentioned that we can be cheated around 30% of the time. There are many false breakouts that eventually simmers back into the Consolidation zone again.
The Last Kiss means the time when it breaks out of the box, it returns to give the box one last kiss. One important thing to note is that, the Candle after the Last Kiss has got to be a long and Bullish/Bearish one, not turning back ;)
That is the rough idea of it. I believe that not all breakouts will give the box a Last Kiss, but I believe that it will try to retrace back close to the box one last time before flying away and leaving behind the sad memories, just like the song.
No comments:
Post a Comment