Buying into a bullish trend on the dips is a popular long term strategy. JPY or any other pair that is on a long forex trendlinien zeichnen bullish trend, wait for it to dip and jump in. You buy when the pair is low and just wait for the trend to continue.
Yet as simple as that may sound, too many traders come out bruised from buying on the dip. The dip turns deeper and deeper until it hits your stop loss and you get thrown out. And then, usually, Murphy’s Law kicks in, and shortly after the pair slices through your stop loss, lo and behold, it starts rising. The bullish trend is back, only you’re not riding it. What you need is a way to figure out how deep the dip is so you can plan your entry and ride on the bullish trend without getting thrown out. One tactic I find to be effective is combining a Gann Fan with an Oscillator.
This allows you to predict, with a greater degree of accuracy, the right time to jump in and buy on the dip. Gann Fan function gives you alternative trend lines above and below. The problem is that it’s hard to tell which alternative trend line will be the one to actually hold and allow the trend to continue, leaving you no better off than you were without the Gann Fan. Dennoch, if we combine the Gann Fan with an oscillator, die Gann Fan becomes much more accurate. Possible oscillators to use are the MACD, Stochastischer Oszillator oder, in our case, the Moving Average Oscillator.
Both A and B break and fail to hold but C holds. What makes Point C so special? Only in Point C does our Oscillator move from negative to positive, suggesting a change in momentum, and signaling that this is the true support line. Here are a few tricks to avoid the most common.