moneymaking
Short

GBPJPY: BEARISH FLAG PATTERN FORMED, WAITING FOR BREAKOUT [D]!!!

FX:GBPJPY   British Pound/Japanese Yen
a year ago
Hello Traders,

Here we have a valid bearish flag pattern on FX:GBPJPY             and now we are just waiting for a breakout to the downside. Flag patterns are also consolidation patterns, just like any other harmonic patterns ( cypher , bat, butterfly , crab , gartley ). This pattern is usually formed after a strong movement in price action. There are 3 main parts to this pattern: the flag pole, flag portion, and the continuation portion. After a strong movement, a strong selloff in this case, the market starts to consolidate and we expect the market to breakout in the direction of the flag pole, in our case to the downside.

After getting the breakout, the target is equal to the length of the flag pole, which is 757 pips for this setup. Also a key point to keep in mind is that, the longer the market stays within the consolidation zone (flag portion), the stronger the breakout to the downside will be. The invalidation point for this flag pattern is when we get a break AND close above the upper rising trend line of the flag portion. Note that we are also getting bearish divergence on the RSI . See the chart above for more details.

NOTE #1: Before we reach our full target located at 177.696 level, we also have 2 very strong daily support levels in our way. So we do have the option to book partial profit at these 2 support levels and than we can leave the last position open till the full target is reached.

NOTE #2: The daily strong resistance level @ 187.027 should be taken into consideration for stop placement only AFTER getting the breakout in the flag pattern to the downside.

Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Thank you everyone for all the SUPPORT that you have given me so far, I truly appreciate it. Good luck everyone :)

Follow me on Twitter as well: moneymaking2016


Importance of daily support & resistance levels:
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Validity of the daily support & resistance levels in 2001 and 2002:
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a year ago
Comment: Validity of daily support & resistance levels from 2008:
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a year ago
Comment: UPDATE #1: Hello traders, we have gotten a really nice inverted hammer or shooting star right at that strong daily resistance level of 187.02. I have placed pending short order at the inverted hammer opening price, risking about 87 pips to potentially make 117 pips in profit :)

snapshot
a year ago
Comment: UPDATE #2: We have gotten a valid breakout to the downside in the flag pattern. Now waiting for a valid re-test of the broken level before going short.

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Hiisham
a year ago
as always very nice
+1 Reply
moneymaking Hiisham
a year ago
Hey mate, thank you as always :)
Reply
IvanLabrie PRO
a year ago
This might ready to be shorted soon.
+1 Reply
moneymaking IvanLabrie
a year ago
Hey mate, I already did short at the 187 even handle, looks like a really strong resistance level :)
+1 Reply
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