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FOREX TRADING COURSE FOR BEGINNERS
MORE OBJECTIVES
In the chapter on trends, we mentioned double and triple tops and bottoms. These formations
also provide us with objectives. Once a double bottom is completed, prices should rise at least as
far as the distance from the bottom of the "W" to the breakout point.
A double bottom is confirmed when prices close above the center of the "W" formation. This is
referred to as the breakout. The difference from the bottom of the formation to the top gives a
price objective. Targets for price declines from double tops are figured the same way.
Often, prices will retest the breakout point after completing the formation. After a double top is
completed, prices may briefly rebound to test the resistance, which is the same point where
the original double top was completed.
TRENDING WITH MOVING AVERAGES
Moving averages are one tool to help you detect a change in trend. They measure buying and
selling pressures under the assumption that no commodity can sustain an uptrend or downtrend
without consistent buying and selling pressure.
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