Page 9 - Futures Money Machine-Study Session #6

Bullish “Flat Bottom Channel Breakout” Trade Rules:

Scan to locate opportunities for this set up and when you do, here are step-by-step instructions on

how to enter this trade on a Bullish trend.

• Identify the most recent area after a big trend down where prices are basing and channeling. Preferable after the

completion of a recent bearish Wave 5 marking the end of that trend.
• The channel needs to be narrow and at least 20 price bars long. The longer and narrower the channel is, the better.
• Draw two horizontal lines, one marking the resistance at the top of the channel and one marking the support at the

bottom of the channel. This makes it easier to see the channel and notice visually when prices breakout of the channel.
• Set an alarm in your charting platform to alert you when prices break above the upper line of the channel and break out

above of the resistance price level
• When prices do break above the upper line of the channel, this is called a “Channel Breakout”.
• Next, wait for a higher low and then higher high after the “Channel Breakout” before initiating a trade.

• The trade should be initiated when prices go above the second higher high. (Or if you use the ART® Trading Software by
TradersCoach.com® wait for a bullish Pyramid Trading Point® entry signal.)

• The price oscillator histogram (or OWL indicator) needs to also be bullish for a long trade.
• Put your initial stop-loss below the higher low or if close enough at the low of the channel where the support line is
• Trail your stops in subsequent higher lows which will represent new levels of price support on the bullish trend. (Or if you

use the ART® Trading Software by TradersCoach.com® wait for a Pyramid Trading Point® exit signal.)