GBP/USD Short After A Triple Top Reversal Candle Formation 4/1/2011
After making a large run to the upside during the London session on Tuesday the market hit a level and simply ran out of steam. It’s been said you never want to be the first one in on a trend nor the last one out. Keeping that principal in mind we were very patient on this one. Given the fact that the Fx market had ran so aggressively to the upside it could have very easily kept moving up. However after the 3rd failed retest of this resistance level, and 3 consecutive lower highs we were fairly certain that the market had ran out of momentum.
Once again we had a beautiful confirmation entry trade setup. First there was the clearly marked reversal candle that was immediately followed by a confirmation candle confirming that the GBP/USD was turning off the resistance level. Once again what we are looking for in a confirmation candle is for a close below the body of the reversal candle. The candle following the shooting star reversal candle pattern clearly meet that criteria. After the close of the confirmation candle we took the entry short on the GBP/USD. Many in the room took a nice profit off of this one ranging from 20-40 pips. Officially however we had a +60 pip take profit and the market missed it by 1 pip:) Sometimes that’s the way it goes….good trade none the less.