GBPJPY 4H HORIZONTAL PRICE CHANNEL PATTERN
Step#1: Draw a Price Channel if you are able to see at least two highs tops and bottom lows. The Price Channel pattern is drawn by connecting the highs and lows.
During this stage, we’re looking for distinctive price action that can be contained within two parallel lines that ultimately will form the Price Channel pattern.
Step #2: Wait for a Swing High to bounce off of the top or fail to reach the top of the Price Channel pattern
In the case of an ascending or upward Price Channel pattern or a Horizontal Price Channel Pattern the first warning signal that the price will fail to trade within the boundaries set by the Price Channel Pattern presents itself when the last swing high point fails to reach the top of the channel.
Only our Price Channel trading strategy makes use of this powerful price reading technique because our team at Trading Strategy Guide has developed the “early signs” of Price Channel breakout.
The fail attempt to test again the top of the Price Channel is a sign of price weakness which is confirmed when the price also fails to bounce off the Price Channel bottom and breaks it instead.
Note* The more times a swing High fails to reach the top of the Price Channel pattern the better the trade setup.
Step #3: or Wait for the Price Channel breakout and for breakout confirmation.
One of the worst mistakes traders does when trading Price Channel patterns is that they don’t wait for confirmation signal when the breakout happens.
You should always wait for breakout confirmation!
What do we mean by breakout confirmation?
In simple terms, we want the breakout candle to post a close outside the Price Channel trendline to confirm the breakout or on a smaller time frame a break-hook-go confirmation. This is a very simple way to avoid many of the false breakout signals. Note* The breakout candle needs to be a big decisive looking candle, but it’s not mandatory
Step #4: BREAKOUT - Sell right at the Breakout Candle Closing Price or the completion of a smaller time frame break-hook-go or BOUNCE - Sell right after a bearish candle pattern has completed (Evening Star, Railroad tracks, engulfing candle).
Step #5: Take Profit 1 at the 50 sma, Take Profit 2 at the bottom point of the Price Channel.
Step #6: Place the protective stop loss at the apporpriate place your trading plan determines.
During this stage, we’re looking for distinctive price action that can be contained within two parallel lines that ultimately will form the Price Channel pattern.
Step #2: Wait for a Swing High to bounce off of the top or fail to reach the top of the Price Channel pattern
In the case of an ascending or upward Price Channel pattern or a Horizontal Price Channel Pattern the first warning signal that the price will fail to trade within the boundaries set by the Price Channel Pattern presents itself when the last swing high point fails to reach the top of the channel.
Only our Price Channel trading strategy makes use of this powerful price reading technique because our team at Trading Strategy Guide has developed the “early signs” of Price Channel breakout.
The fail attempt to test again the top of the Price Channel is a sign of price weakness which is confirmed when the price also fails to bounce off the Price Channel bottom and breaks it instead.
Note* The more times a swing High fails to reach the top of the Price Channel pattern the better the trade setup.
Step #3: or Wait for the Price Channel breakout and for breakout confirmation.
One of the worst mistakes traders does when trading Price Channel patterns is that they don’t wait for confirmation signal when the breakout happens.
You should always wait for breakout confirmation!
What do we mean by breakout confirmation?
In simple terms, we want the breakout candle to post a close outside the Price Channel trendline to confirm the breakout or on a smaller time frame a break-hook-go confirmation. This is a very simple way to avoid many of the false breakout signals. Note* The breakout candle needs to be a big decisive looking candle, but it’s not mandatory
Step #4: BREAKOUT - Sell right at the Breakout Candle Closing Price or the completion of a smaller time frame break-hook-go or BOUNCE - Sell right after a bearish candle pattern has completed (Evening Star, Railroad tracks, engulfing candle).
Step #5: Take Profit 1 at the 50 sma, Take Profit 2 at the bottom point of the Price Channel.
Step #6: Place the protective stop loss at the apporpriate place your trading plan determines.
Comment:
Watch where this 4H closes.
Comment:
Possible bullish continuation
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