We have learned about mouteki method to catch the sell signal in the Chapter One . Now we will learn how this method helping us to catch a buy signal. The first things, the opposite method with sell order, to make a buy order we should define two resistance points.

True points of resistance are only those which high has two candles to the left of it and two candles to the right of it which highs do not exceed the high you are using. See the examples below for reference of true resistance points.

 

 

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After found the resistance, make the trend line by connect the first point to second point, check the example :

 

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Once we have created the down trend line, our next step is to use this trend line to create a upside price projection once the market opens a candle on the four hour chart above the supply line. The price projection is created this way; you take the lowest low created below the supply line and mark it with a vertical line. As figured below :

 

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Next you need to take a horizontal line and mark the point where the vertical line coming from the lowest low recorded below the trend line intersect with the trend line. What seems complicated at first will be much easier observed and understood in the example below.

 

 

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Note the two values listed on the chart. In the next step we take the difference between the lowest low recorded below the trend line and the point where the trend line is intersected by the vertical line.

1.9705 - 1.9591 = 0.0114 ( Formula 1 )

We get a difference of 114 pips. This number becomes our price projection. The final step in the process is the point of application of the price projection. The price projection will be 114 pips to the upside once a four hour candle has opened below the demand line. It is key to become accustomed to this technique because price usually reacts quickly to the upside once a candle has opened. Valuable pips will be lost if the trader does not react quickly in many cases.

The next step is open the buy order at the the first candle open above the trend line for example we put sell @1.9692

1.9692- 0.0114 = 1.9806 ( Formula 2 )
So our upside price projection /TP at price 1.9806. See the picture :

 

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Then Let's see how this amazing method work, could it reach out price projection?

 

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Well, it could hit the target price, 114 Pips in our pocket. How wonderful method!

The keys to win in forex trading are read, learn and try,  whatever the forex method including the method above ot the others. Read, Learn, and Try it in several times will help you to understand and confident about those method. Afterthat I believe that you could win in the forex trading. Not Always but Almost

 

 

Source : ForexFactory Forum