CHAPTER 5
The Last Kiss
To me, there is no greater act of courage than being the one who kisses first.
—Janeane Garofalo
All of the naked-trading strategies in this book have three parts: The first is to identify the support and resistance zones, the second is to wait for the market to reach one of these zones, and the third is to take a trade once a catalyst prints on one of these zones.
You now understand how to find zones on the chart, and you are ready to learn about catalysts. Catalysts are powerful price patterns. These simple price patterns suggest what the market may do once the market reaches a zone. These catalysts are only useful when they print on a zone; catalysts that are not located on a zone are simply interesting price formations—they are not high-probability trade set-ups. A very simple and extremely powerful catalyst is the last-kiss trade.
If you have been trading for some time, you have probably seen enough of the markets to know that there are two basic moods of the market, and these moods will be seen in any market in the world. There is the calm, drifting, directionless, choppy market as is evident in Figure 5.1. At times, the market will also exhibit strong, powerful explosions characteristic of the trending market as can be seen in Figure 5.2. The market is always in one of these two moods.
Figure 5.1 This EUR/USD four-hour chart is in the classic consolidation phase. Notice price movement is choppy, and directionless and does not seem to go anywhere. ...
