Double Top Pattern On GBP/USD - 4-hour
Hi Traders,
Happy Wednesday.
Today we are looking at GBP/USD.
We are on the 4-hour time frame and we can see we have a double top playing out.
Notice the two peaks of the double top ( I have placed arrows on each peak ) Notice the divergence of the histogram on the MACD across these two peaks. This indicates that the sellers are coming in hot and taking control because the buyers have been weakening.
We also know that we are trading with the current market trend. There's no reason for us to look for long positions in most of the major pairs right now as the DXY is rocketing up and the Euro and Pound are struggling to form a bottom. So remember, if you want to give your strategy a further edge, trade with the trend. Our current market bias on this pair is short so we have been looking for short positions.
I have highlighted the neckline zone in yellow. I was waiting for a retrace to the topmost point of this zone. I wanted the price to hit the resistance of that zone before opening up a short position. This gives me a higher risk to reward and I am looking for a risk to reward of one to three for this particular setup.
Switching to the weekly time frame we can see that we have support around the 1.165 level.
Price always seems to react around this level and there is technically no previous price structure to stop us on the way down. This is why I have chosen the 1.165 price level as my target for this double top.
My short position opened early this morning whilst I was away from my computer so I decided to showcase this trade to you guys because it is always interesting to see how these things tend to play out. I am a patient swing trader and most of my entries occur within the 4-hour time frame.
So let's wait and see if this pair is indeed going to move down even lower towards my target.
Double tops and double bottoms are one of the most popular chart patterns to use and it's always a great tool to add to your bag of tricks when trading forex.
Keep your eyes peeled!
So on that note, let's watch and see what happens.
I will be seeing you all in the next one.
Hope you all have a great day!
The Vortex Trader
Happy Wednesday.
Today we are looking at GBP/USD.
We are on the 4-hour time frame and we can see we have a double top playing out.
Notice the two peaks of the double top ( I have placed arrows on each peak ) Notice the divergence of the histogram on the MACD across these two peaks. This indicates that the sellers are coming in hot and taking control because the buyers have been weakening.
We also know that we are trading with the current market trend. There's no reason for us to look for long positions in most of the major pairs right now as the DXY is rocketing up and the Euro and Pound are struggling to form a bottom. So remember, if you want to give your strategy a further edge, trade with the trend. Our current market bias on this pair is short so we have been looking for short positions.
I have highlighted the neckline zone in yellow. I was waiting for a retrace to the topmost point of this zone. I wanted the price to hit the resistance of that zone before opening up a short position. This gives me a higher risk to reward and I am looking for a risk to reward of one to three for this particular setup.
Switching to the weekly time frame we can see that we have support around the 1.165 level.
Price always seems to react around this level and there is technically no previous price structure to stop us on the way down. This is why I have chosen the 1.165 price level as my target for this double top.
My short position opened early this morning whilst I was away from my computer so I decided to showcase this trade to you guys because it is always interesting to see how these things tend to play out. I am a patient swing trader and most of my entries occur within the 4-hour time frame.
So let's wait and see if this pair is indeed going to move down even lower towards my target.
Double tops and double bottoms are one of the most popular chart patterns to use and it's always a great tool to add to your bag of tricks when trading forex.
Keep your eyes peeled!
So on that note, let's watch and see what happens.
I will be seeing you all in the next one.
Hope you all have a great day!
The Vortex Trader