GBPJPY is trading a diamond continuous bullish pattern on its daily chart.
The price is trading above Mid: 160.498 and approaching the Breakout: 172.129.
Stop below the low previous to the Breakout: 172.129.
Targets:
62%: 186.658
79%: 190.717
100%:195.674
The price is trading above Mid: 160.498 and approaching the Breakout: 172.129.
Stop below the low previous to the Breakout: 172.129.
Targets:
62%: 186.658
79%: 190.717
100%:195.674
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Chart patterns classification of 'Continuous' or 'Reversal' patterns helps traders to identify specific patterns and expect their outcome from current price action.
Reversal patterns exhibit a total shift of trends from bullish to bearish or bearish to bullish in a single pattern structure.
Examples of the reversal patterns are 'Head and Shoulders, Double Tops and Bottoms...
A knowledge of reversal patterns or continuous patterns helps traders to estimate the end of trends or continuous trends to execute trades in a timely fashion for maximum gains. This knowledge also helps traders to time the trades in the opposite direction and to place smaller stop levels.
Here I discuss one of the key reversal Chart Pattern and present examples of them:
Diamond patterns are both continuation and reversal patterns.
It is also similar to adding two "triangle" patterns, Inverted and Symmetrical, together.
If the pattern occurs in the midst of a trend, it will present a continuation of the trend in the same direction prior to the formation.
Continuation Diamond Pattern Bullish:
If the pattern occurs at the tops or bottoms, it will be a reversal pattern.
Diamond Top:
Trade Entries:
Diamond Tops /Bottoms and continuous Patterns:
Primarly Entry Point:
Trade the Breakup/Breakdown at the mid 50% Range of the Diamond Pattern Height
Example Diamond Bottom Primarly Entry Point:
Secondary Entry Point:
Trade the breakup/breakdown of the high/low of the Diamond Pattern
Example Diamond Bottom Secondary Entry Point:
Stops:
Diamonds Bullish Patterns: Set a stop below the low previous to the breakout
Diamonds Bearish Patterns: Set a stop above the high previous to the brekout
Targets:
Diamond Tops and Diamonds Bottoms Patterns Targets are set to 62-79%. 127-162% of the Diamond Patterns Height
Diamonds continuous Bullish/ Bearish Patterns targets are set tfrom the range of AB from C or the 62-79% of the Diamond height
Example Diamond continuous bearish Target: