To close out my weeklong takeover of Market Minute, I want to show you my bread-and-butter trade setup.
This setup is responsible for many of the biggest forex trades in my career.
The best part is that it’s so simple and easy to spot on a price chart – you should be able to go ahead and find this setup on your own…
The trade was taken on the U.S. dollar and Russian ruble currency pair (USD/RUB).
I bought the currency pair, which meant I was expecting the dollar to go up in value against the ruble.
Let’s look at the USD/RUB price chart on the day I entered the trade, so I can walk you through what happened…
On February 21, I bought the currency pair. This was three days before Russia ignited the current geopolitical conflict in Ukraine.
I had been tracking this developing pattern in USD/RUB over the last several months and was expecting it to break out in early 2022.
The chart pattern above is known as a “triangle” and it consists of two trendlines (blue lines) containing sideways price action.
There are many variations of triangles such as ascending, descending, and symmetrical. But what all triangles have in common is a general sideways look to the price action contained by the two trendlines.
Triangles are my favorite setups to trade because they almost always lead to exciting breakouts.
All that sideways action is like steam building up inside a kettle. Once the kettle brings the water inside to a boil, all that built-up steam must escape somewhere.
Once a triangle breaks out, I know there will likely be a great trade to take.
Just look at what happened after the USD/RUB triangle broke out…
Now, I wish I could tell you that I rode this trade to the very top and got out for an enormous profit.
But the truth is that I exited the trade after just two days – and I was lucky to do so.
The chart warned me of a higher burst of volatility in USD/RUB, but I wasn’t sure what the catalyst for such a move would be.
With everything in the news pointing toward a potential invasion, I knew it was prudent to take a modest win and get out.
My instinct told me brokers might halt trading on the currency pair, and I didn’t want my trade to freeze where I couldn’t sell my position… I was fortunate I exited the trade when I did.
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The very next day, Russia invaded Ukraine. And not long after, my broker did indeed halt trading on the ruble.
You can check out my order ticket for the USD/RUB trade below…
The moral of the story is that usually a chart will tell you in advance – sometimes days, weeks, or even months – what a market is going to do before you see the headlines in the news.
That’s why technical analysis is the best tool for traders.
All you need is a small handful of reliable patterns that lead to predictable outcomes.
Happy trading,
Imre Gams
Analyst, Market Minute
P.S. Technical analysis has been the key to scoring my biggest forex gains. In fact, lately I’ve been beta testing for my new forex service… and the result is a perfect 13 winners out of 13 trades.
You can see the results for yourself during Jeff Clark’s confidential update on Saturday at 8 a.m. ET. Just click here to sign up.
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