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Double Top on GBP/USD Daily Chart

November 3, 2013 (Last updated on November 13, 2013)

EUR/AUD is not the only pair forming a double top recently. If you look at the daily chart of the Pound vs. Dollar pair, it is easy to notice that the price has hit a significant resistance near the prominent twin tops (October 1 and October 23). The resulting double top pattern is an opportunity to cash out on the trend retracement of the bullish wave that lasted since July 9 this year (there was a nice ascending channel trade on GBP/USD D1 during that trend).

The chart below depicts a trade setup generated by my ChannelPattern script with pattern’s height channel taken as a guide. The double top is delimited with yellow lines. The entry level is shown with a cyan line. The take-profit level, a conservative one (100% of the pattern’s height), is marked with a green line. The stop-loss can be set to the high of the breakout bar. Bullish breakouts from the double top pattern are usually ignored. You can click on the image to view a full-sized chart screenshot:

GBP/USD - Double Top on Daily Chart as of 2013-11-03
You can download my MetaTrader 4 chart template for this GBP/USD pattern. I will use my free Chart Pattern Helper EA to trade this pattern.

Update 2013-11-12 9:57 GMT: Sell order triggered at 1.58558 at 09:31 GMT today. Stop-loss was set to 1.59919, take-profit was set to 1.55246. Although the breakout candle is very strong, it barely touched the entry level and may go for a retracement from this point. Please have a look at this post-entry chart screenshot (click to enlarge):

GBP/USD - Double Top Post Entry Screenshot as of 2013-11-12

Update 2013-11-13 19:18 GMT: Looks like the unemployment report from the United Kingdom has killed my position. The trade failed as the currency pair retraced back to stop-loss at 10:30 GMT today. It lasted just little over a day:

GBP/USD - Double Top Post Exit Screenshot as of 2013-11-13

If you have any questions or comments regarding this double top on GBP/USD chart, please feel free to submit them via the form below.

11 Responses to “Double Top on GBP/USD Daily Chart”

  1. Peter

    I will like to state here that ur doing a great job here. I found this system of urs very useful in my trading style. I will like to know if I can apply this same GBPUSD Template to other pairs. Thanks.

    Reply

    Andriy Moraru Reply:

    No, you cannot apply the same template file to other currency pairs. But you can easily use the same principle with other pairs. Just draw a border channel (rename it to Border) and then apply ChartPattern script to it.

    Reply

  2. Peter

    Thanks for your response. I’m afraid I cannot do that, I’m not a programmer. However, I will be following your post here, I should be able to get templates for other pairs. Thanks.

    Reply

    Andriy Moraru Reply:

    The trick is you don’t have to be programmer to do that.

    Reply

  3. Peter

    Really? Could you please show me how? I’ll appreciate it. Thanks.

    Reply

    Andriy Moraru Reply:

    Drawing channels in MT4 is really easy: Insert->Channel->Equidistant. Then simply place it on the chart and adjust to your needs. Right click on it to change its properties and rename it to “Border”, then run ChartPattern script.

    Reply

  4. Peter

    Okay, I get that.
    But, can this chart pattern automatically adjust itself to changing price? Thanks.

    Reply

    Andriy Moraru Reply:

    No, sorry. It is not completely automatic. The initial pattern is detected by trader manually.

    Reply

  5. Jacek

    Good luck with this setup! It looks pretty solid.

    Reply

    Andriy Moraru Reply:

    Thanks, but it has already retraced quite far up. Hope it won’t hit stop-loss tomorrow :-).

    Reply

    Andriy Moraru Reply:

    Heh… Good news for British people – bad news for me today :-(.

    Reply

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