Daily Trading Opportunity: Forming Peak pattern in price
Forming a Peak pattern in price is one of the most successful patterns of forecasting the descend of prices. 4CastMachine software analyzes and discovers forming Peak price pattern for all charts. As a result, we can quickly and easily pay attention to just the charts in which an important decrease is occurring and where a very good trading opportunity has been set.
Negative numbers in Peak/Valley(Trough) show a Peak pattern forming. Strengths of Peaks are between zero to about -100: the closer number to -100 the greater strength.
As the strength of each pattern directly related to the probability of its success, it is better to collect the ones which have more strength.
A good trading opportunity: Forming a Peak Pattern
By forming a Peak in Daily Charts, the probability of the price decreasing more - tomorrow and after that - is very high, so we can enter the market by selling trades.
Example:
Considering the front image, 4CastMachine shows a strong Peak for NZD/USD pair on 2014.07.16 forming.
The strength of Peak is -33.
Performance of sell trade:
As seen in the front image, sell trade produced more than 1050 pips profit.
Although in many cases, after the formation of the Peak price pattern as the only sign of a downturn, great fall also occur, but it is better to have other technical reasons to reinforce the price fall guess and then think about making a trade.
If Peak forming is accompanied by a Downtrend or it is in a Resistance area, there will be a very good trading opportunity.
A very good trading opportunity: Forming a Peak in a Downtrend
Formation of a new Peak in a downtrend shows that a new falling wave is starting and the downtrend is resuming. So, a Peak forming in a downtrend is a very successful trading opportunity.
Example:
Considering the front image, 4CastMachine shows a strong downtrend and a strong Peak forming for GBP/USD pair on 2013.02.02.
The strength of Downtrend is -25.
The strength of Peak is -57.
Performance of sell trade:
As seen in the front image, sell trade produced more than 850 pips profit.
A very good trading opportunity: Forming a Peak in a Resistance area
The most important technical factor which prevents the price from increasing more and causes it’s falling to resume is a resistance area. If a Peak formed after price bounced from resistance area, selling trades have a high probability of success.
Example:
Considering the front image, 4CastMachine shows a strong Peak pattern after price bounced from 110.75 resistance level for EUR/JPY Pair on 2012.03.30.
The Strength of Peak is -46.
Performance of sell trade:
As seen in the front image, sell trade produced more than 1400 pips profit.