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Disfigured Double Top on GBP/CAD Weekly Chart

February 7, 2016 (Last updated on March 31, 2016) by

Not all chart patterns are created to look like an ideal example — some of them look horribly despite meeting the formal requirements of their kind. The latest development on GBP/CAD weekly chart is just such a case. The pattern began forming back in July 2015. The first top was reached in the end of August, then the middle bottom was set in October. The second part peaked in December 2015 but has also shown another similarly sized spike in January of 2016. The pattern is a consolidation of a long-term uptrend, which had started back in November 2014.

The yellow lines depict the borders of the pattern. The upper one is drawn on the tops; the lower one serves as the pattern’s neckline. The cyan line is my sell trade trigger. It is positioned at 10% of the pattern’s height below the lower border. At 100% of the height, you can see my potential profit target — the green line. I will set my stop-loss to the high of the breakout bar or to the high of the preceding bar if the major part of the breakout bar is below the border. I will ignore the bullish breakouts from this pattern unless it develops into a horizontal channel first. You can click on the image below to see the full size chart:

GBP/CAD - Double Top Pattern on Weekly Chart as of 2016-02-07

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/CAD pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2016-02-18: The short trade entered yesterday on a strong breakout down. Entry level is at 1.96127, stop-loss is at 2.02925, and take-profit is at 1.85090.

GBP/CAD - Double Top Pattern on Weekly Chart - Post Entry Screenshot as of 2016-02-18

Update 2016-03-31: Take-profit was hit today at 13:44 GMT. The funny thing is that the price has already been just few pips away from the TP level three times during the last two weeks. Today, it has finally touched it:

GBP/CAD - Double Top Pattern on Weekly Chart - Post Exit Screenshot as of 2016-03-31

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

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