The corrective phase is simply a temporary interruption of the larger trend. Here’s how it works…<\/p>\n
How To Identify a Corrective Sequence<\/h2>\n
When a big move is finally exhausted the market will pull back, correcting the prior move. Eventually, the market will finish correcting, and the larger trend will resume.<\/p>\n
Traders should sit on the sidelines once a market starts correcting. They should look to get into trades as the corrective phase comes to an end, and the next impulsive phase is set to begin.<\/p>\n
You can easily identify a corrective sequence on a price chart because it’s almost always contained by two trendlines.<\/p>\n
If the trendlines are either parallel or converging on one another, then you likely have a corrective sequence on your hands.<\/p>\n
Here’s an example of a recent corrective price action from a Currency Trader <\/em>recommendation…<\/p>\n On March 3, I issued a trade recommendation to subscribers of my Currency Trader<\/em><\/a> advisory. The recommendation was to set a buy entry order on the U.S. dollar and Canadian dollar currency pair (USD\/CAD).<\/p>\n I had identified a corrective price pattern in USD\/CAD, which had interrupted an uptrend that started on February 14. Check out the price chart below…<\/p>\n <\/p>\n I’ve drawn the corrective pattern using blue lines. You can see how this corrective pattern interrupted the larger uptrend. This pattern is known as a triangle and is one of my go-to trade setups.<\/p>\n When prices break out of the triangle’s trendlines, you can be sure to expect a big move. And that’s exactly what happened in the case of USD\/CAD.<\/p>\n Take a look at what happened after I recommended buying this currency pair…<\/p>\n <\/p>\n USD\/CAD did indeed have a big move to the upside. As a result, my subscribers were able to bank a gain of around 180%<\/a> on this trade.<\/p>\n <\/p>\n Free Trading Resources<\/strong><\/p>\n Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n <\/p>\n This is exactly why it’s so important to be able to identify the different phases of market behaviour.<\/p>\n If I had issued my trade recommendation in the middle of the corrective phase, then it’s possible the trade would have been stopped out for a loss instead of a gain.<\/p>\n Being able to differentiate between the impulsive and corrective phases is my foundation for consistently finding big moves in the market.<\/p>\n The good news is that you can do the exact same thing. My suggestion is to start by looking for only one kind of corrective pattern at a time.<\/p>\n For example, you could master the triangle first, just like I did. Once you are confident with the triangle, you can add another setup to your trading plan.<\/p>\n Pretty soon, you’ll have several reliable high-quality corrective price patterns in your trading toolbox.<\/p>\n And that means finding those big moves will eventually become second nature.<\/p>\n Happy trading,<\/p>\n Imre Gams P.S.<\/strong> If you’re interested in making profitable trades like USD\/CAD, you can check out my forex trading advisory right here<\/a>.<\/p>\n Besides a 93%-win rate, I also provide my subscribers with plenty of educational content to help you start finding big moves on your own.<\/p>\n And if you have any questions about trading or the market, I’m always there to answer through regular videos and updates.<\/p>\n Are you confident in your ability to correctly identify impulsive and corrective market phases?<\/p>\nCorrective Price Pattern in USD\/CAD<\/h2>\n
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