GBP/USD Bull Flag - 1-Hour Chart
Today we are looking at GBP/USD on the 1-Hour chart.
We have a potential bull flag set up.
Now, this is very important, this is a counter-trend setup. On the 4-hour and daily charts, the price is still incredibly bearish. We have touched a major support zone on the daily time frame so looking for some bullish setups is perfectly reasonable, however, we have to be careful.
On the 1-hour chart, we can see we have a nice impulse up which forms the flag pole. Then we have two giant wicks (which I am not a fan of with flag setups)
These wicks were filling the imbalance formed on the left. Those gaps have been filled.
I then put a zone around those wicks at the very top of the flag pole. This is a strong resistance zone. For this setup to be validated, I want to see the price close strongly above this region. We also need a strong bullish volume to accompany this impulsive move through the resistance zone. If we see this, I would be waiting for a retrace back into this zone.
Now, the problem arises with how deep we want the retrace to be. This resistance zone is quite large because of those giant wicks. I am a very conservative swing trader so I would probably wait for quite a deep retrace. This would give me a better entry as well as a higher risk to reward. I may or may not miss an entry by waiting for a deeper retrace. However, in my experience, patience is key and If it does retrace to my entry-level, I can manage my risk and risk to reward a lot better than if I entered with a shallow retrace.
My targets would be up above at previous price structure around the 1.1928 price level.
However, we must understand that as this is a counter-trend setup, we have to consider that and not risk as much. If we can practice doing this with lower grade probability setups, then this will help us achieve profits with positions even when we go against the trend.
If the price does not break above the resistance zone and retrace back into it then I will not be looking for any entries. The flag will become invalidated (in my eyes) and I will move on. I have set up an alert which that will inform me when the price closes through the resistance zone. Let's keep an eye out.
It's always bennificial to see what price does on occasions like this.
See you on the next one
The Vortex Trader.
We have a potential bull flag set up.
Now, this is very important, this is a counter-trend setup. On the 4-hour and daily charts, the price is still incredibly bearish. We have touched a major support zone on the daily time frame so looking for some bullish setups is perfectly reasonable, however, we have to be careful.
On the 1-hour chart, we can see we have a nice impulse up which forms the flag pole. Then we have two giant wicks (which I am not a fan of with flag setups)
These wicks were filling the imbalance formed on the left. Those gaps have been filled.
I then put a zone around those wicks at the very top of the flag pole. This is a strong resistance zone. For this setup to be validated, I want to see the price close strongly above this region. We also need a strong bullish volume to accompany this impulsive move through the resistance zone. If we see this, I would be waiting for a retrace back into this zone.
Now, the problem arises with how deep we want the retrace to be. This resistance zone is quite large because of those giant wicks. I am a very conservative swing trader so I would probably wait for quite a deep retrace. This would give me a better entry as well as a higher risk to reward. I may or may not miss an entry by waiting for a deeper retrace. However, in my experience, patience is key and If it does retrace to my entry-level, I can manage my risk and risk to reward a lot better than if I entered with a shallow retrace.
My targets would be up above at previous price structure around the 1.1928 price level.
However, we must understand that as this is a counter-trend setup, we have to consider that and not risk as much. If we can practice doing this with lower grade probability setups, then this will help us achieve profits with positions even when we go against the trend.
If the price does not break above the resistance zone and retrace back into it then I will not be looking for any entries. The flag will become invalidated (in my eyes) and I will move on. I have set up an alert which that will inform me when the price closes through the resistance zone. Let's keep an eye out.
It's always bennificial to see what price does on occasions like this.
See you on the next one
The Vortex Trader.