Ascending Chanel and Double Top “TREND REVERSAL” Trading Pattern

Ascending Chanel and Double Top “REVERSAL” Trading Pattern (Case Study: GBPJPY 27-31 January 2020)

Both are reversal patterns, I am expecting Downside Move.

• JPY Going to be Strong that by the Reason All xxxJPY Pairs Looking For SELL.

An ascending channel is the price action contained between upward sloping parallel lines.

Higher highs and higher lows characterize this price pattern.

Technical analysts construct an ascending channel by drawing a lower trend line that connects the swing lows, and an upper channel line that joins the swing highs.

The pattern’s opposite counterpart is the descending channel

• An ascending channel is used in technical analysis to show an uptrend in a security’s price.
• It is formed from two positive sloping trend lines drawn above and below a price series depicting resistance and support levels, respectively.
• Channels are used commonly in technical analysis to confirm trends and identify breakouts and reversals.

Within an ascending channel, price does not always remain entirely contained within the pattern’s parallel lines but instead shows areas of support and resistance that traders can use to set stop-loss orders and profit targets.

A breakout above an ascending channel can signal a continuation of the move higher, while a breakdown below an ascending channel can indicate a possible trend change.

Ascending channels show a clearly defined uptrend.

Traders can swing trade between the pattern’s support and resistance levels or trade in the direction of a breakout or breakdown.

When a double top or double bottom chart pattern appears, a trend reversal has begun.

A double top is a reversal pattern that is formed after there is an extended move up.

The “tops” are peaks that are formed when the price hits a certain level that can’t be broken.

After hitting this level, the price will bounce off it slightly but then return back to test the level again.

If the price bounces off of that level again, then you have a DOUBLE top!

Remember that double tops are a trend reversal formation so you’ll want to look for these after there is a strong uptrend.

 

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