RRR-wise, it can’t get much better than this $GDX trade! My estimate is an initial RRR of about 20:1!!! How are the odds that this plays out as planned? I don’t know, as I have never backtested wedge breaks. But it doesn’t really matter that much, be it 50% win ratio or 20% or even 10%, this bet is good! Let the wedge break to the upside and long the shiz out of it. Stops below the recent lows or below the supporting trendline.
* Please don’t take this as investment advice. I’m just presenting my opinion about the market.
I have skimmed through a backtest of my strategy on EURUSD on the 3 minute chart. And ignoring spreads the results look similar to the very promising backtests off the 4H and daily charts. That’s my green light to trade this whenever opportunity presents itself. So here is my first entry, almost in realtime:
The German DAX finally touched the upside of a long-term ascending and immediately gets rejected almost 150 points. Technically this provides an opportunity for a bigger correction, but with all this central bank support of the financial markets you never know. Anyway, I am still cheering for a correction, I have not managed to participate in this rallye enough!