📈 How to Utilize the "W" Pattern to Capture Trend Reversals?
This pattern indicates the beginning of a strong upward movement! Here are the steps to benefit from it:
🔍 Pattern Characteristics:
- Two similar bottoms (W): separated by a small peak.
- Resistance Break: the strongest signal to start the upward movement.
- Hammer Candle: may appear at the second bottom as additional support.
🎯 Trading Strategy:
1. Entry Point (ENTRY):
- Enter a buy after breaking the resistance line with an increase in trading volume.
- Ensure the price stabilizes above the resistance before entering.
2. Stop Loss (STOPLOSS):
- Place it below the second bottom or the lowest level in the pattern.
- Stick to the 10% rule (do not risk more than 10% of your capital).
3. Target (TARGET):
- Set the target at 100% of the pattern's height (the distance between the bottom and resistance).
- The 50% level can be used as a profit-taking area.
💡 Golden Tip:
The pattern is stronger when it appears after a clear downward trend and is accompanied by high trading volume at the breakout!
🚨 Alert:
The pattern reflects the strength of buyers after two failed attempts to drop, but it needs confirmation of the breakout and logical targeting.
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