Traders make consistent money because they are not wedded to a stock, a position or a view on the markets. When facts change, traders change their position.
It's not a very satisfactory situation for people who want certainty or firm predictions but it is very profitable. This is the reason traders use stop-losses while many investors do not even understand the concept, let alone use a stop.
Traders were called on to exercise this agility and flexibility this week when the dollar index staged a strong rally to close the week at $0.973.
The rally is not so important. What's important is the strong close above the downtrend trend line A.
Does this mean our analysis from last week is incorrect? The analysis is correct, but our conclusion that there was, on balance, a bearish bias, was incorrect. The symmetrical triangle is a pattern of indecision. The potential to break up or down from the pattern is around 50 percent either way. We used the dips below trend line B to identify a slight shift in the balance of probability towards the bearish side.