138 PIPS ON GBP USD AS USD STRENGTHENS ACROSS THE FOREX MARKET
This latest trade took advantage of the Bearish Consolidation Breakout on the Daily Chart of the GBP USD which started in the last week of December. It provided a gain of 138 Pips within 4 days, just ahead of the pullback that is now taking place. Entry was based on the Daily Chart's Bearish Candlestick Signals as well as the setup on the 4 Hour Chart.
The first video below shows the description and analysis of the Daily and 4 Hour Charts before the trade was made.
This video shows the trade result and provides a detailed analysis of the main elements behind the breakout.
The Daily Chart below shows the Pennant Setup and Candlestick Signals that started and continued the breakout below the Support boundary. The target was set to the Breakout Equivalent (see Trading Manual & Video above) of the previous Consolidation at 1,4562.
DAILY CHART TRADE SETUP
|(FXCM Charts used for Entry Signals based on the New York Close of the Daily Candle)|
After analyzing the Setup on the 4 Hour Chart and being satisfied that it met the requirements for the trade, an Entry Order was set. Within 4 Days, the trading target was hit.
DAILY CHART TRADE RESULT
|(Dukascopy Charts used for actual trades)|
The Breakout Equivalent is the target to which Consolidations head towards before pulling back. It is therefore the best area to exit when it comes to these types of trades. This is being confirmed by the pullback now taking place on the 1 Hour Chart with a Tweezer Bottom - a common Candlestick Signal that leads to reversals.
TWEEZER BOTTOM RALLY 1 HOUR CHART
Identifying Consolidation Setups and entering at the right time can be the easier parts of these trades. However, deciding where to exit is a common dilemma. By being able to accurately spot these pullback areas that are associated with Consolidations ahead of time, we can take the guess work out of where to take profit when it comes to these popular but challenging setups.