Convergence AUDJPY Sell Signal
Overnight we saw good structure in the price action on AUDJPY for a potential selling opportunity.
As you can see from the chart, price rose higher to the recent level of resistance creating a triple top formation. What we liked about this set up was that we also had another bearish signal form within this triple top which was a bearish 3 drive pattern.
As traders, the more factors that align together can help increase the probability of the outcome. When we had both bearish patterns converge at the same point, we just have to wait and be patient to see if price started to trade lower which occurred nicely.
We have drawn a micro diagonal trend line below the two patterns because if this trend line breaks to the downside this can help pinpoint the potential execution level to enter this trade.
For proper trade management in this example, we would want to place a stop loss just above the level of resistance around the 75.12 level and look to manage your trade by taking profits along the way right down to the 74.00 big figure.
As you can see from the chart, price rose higher to the recent level of resistance creating a triple top formation. What we liked about this set up was that we also had another bearish signal form within this triple top which was a bearish 3 drive pattern.
As traders, the more factors that align together can help increase the probability of the outcome. When we had both bearish patterns converge at the same point, we just have to wait and be patient to see if price started to trade lower which occurred nicely.
We have drawn a micro diagonal trend line below the two patterns because if this trend line breaks to the downside this can help pinpoint the potential execution level to enter this trade.
For proper trade management in this example, we would want to place a stop loss just above the level of resistance around the 75.12 level and look to manage your trade by taking profits along the way right down to the 74.00 big figure.
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