DislikedHi Oldtraderman Good to see you back posting! I found this potential setup on GBPUSD yesterday. Would this classify as a valid entry? Cheers {image}Ignored
I would classify that as pretty much a textbook example (if I were to ever write a book on it!). It has all the key characteristics:
- an obvious box of good size after a price move
- a sharp spike out that is immediately reversed
- and you'd be trading with the trend, i.e. short
The last point I have yet to discuss but your chart is the perfect opportunity for this now: It is always best to trade with the trend where there is one. Your chart shows a strong downtrend so I'd only take false breaks out of the top of that box, and ignore breaks out of the bottom altogether. Where there is no distinct trend, then false breaks either side are tradeable.
Many thanks for the chart!
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