The longer price takes to reach the desired level for a short position, and the more corrective it is getting there, the better it is for us. This increases the probability of this bear flag pattern playing out to the downside.
If you take a closer look at the scenario we have outlined, price breaks the high of the pattern and immediately retraces back into the pattern, followed by a tight correction. This type of price action is by far my favorite because it catches traders on the wrong side, a "false breakout".
Also, I really want to emphasize the importance of waiting for price to form a correction AFTER it retraces back into the pattern, this confirms it is truly back in the pattern. There is a higher chance price will continue to break out of the pattern if it does not form a correction, in this case, a bear flag to continue to the downside.
www.thepipbull.com
EURGBP
If you take a closer look at the scenario we have outlined, price breaks the high of the pattern and immediately retraces back into the pattern, followed by a tight correction. This type of price action is by far my favorite because it catches traders on the wrong side, a "false breakout".
Also, I really want to emphasize the importance of waiting for price to form a correction AFTER it retraces back into the pattern, this confirms it is truly back in the pattern. There is a higher chance price will continue to break out of the pattern if it does not form a correction, in this case, a bear flag to continue to the downside.
www.thepipbull.com
EURGBP