My Millionaire Goal

GBPUSD 16 Mar Update

As predicted in the previous post, Bar A is indeed a failed reversal bar… trapping bears into believing that the market is going to reverse.

The main reason for not taking this reversal trade is because of the strong prior (bullish) trend.. Bar A is the first bar that has a low lower than its previous bar, a second confirmation is needed before selling.

Reading Price Action

You can see that there’s a MACD divergence setup here… suggesting a reversal. In addition, the bar before Bar A is a small bearish reversal bar. However, the prior trend was too strong and I wouldn’t sell until I get a second confirmation. This setup may turn out to be a failed reversal, setting up for a bullish breakout (though the breakout is probably just a scalp, given the presence of a MACD Divergence).

GBPUSD 16 Mar

1. MACD Divergence
2. Fibo 38.2 + Breakout of a trading range
3. Down Up Twin Bars (circled in red).
   The first bar broke out of the trading range, tricking bears into selling. However, the next bar is a strong bull bar that reversed the bearish breakout. Bear are now trapped and needs to stop loss, giving further strength to the resulting rally.