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How To Trade Round Bottoms

This article will be focused on a well known chart pattern, the Rounding Bottom. It is not a common pattern, though when identified it can give excellent trading signals due to its long creation.

Illustration

Broadening Megaphone in USD\CAD, 5-minute Chart

Broadening Megaphone Chart Pattern at the USD-Canadian currency pair. Pattern is reliable as its Support and Resistance levels have been tested for 8 times in total. Pattern is 35 pips in size, so we will be careful when entering, to be sure that the Risk:Reward is more than 1.5.

Trades
Short trade will be taken after breakout of Support level and when price Pulls back.

+600 Pips Profit - Broadening Megaphone in GBP\USD

Update to the Broadening Megaphone chart pattern posted in June 27th:
http://www.chartsecret.com/content/broadening-megaphone-gbpusd-four-hour...

Price reached resistance, created an Bearish Engulfing Candlestick formation and began a strong downtrend, yielding over 600 pips in profit. The down-slope Moving Average preventing us from taking profits too early in this trade.

Broadening Megaphone in GBP\JPY

A Broadening Megaphone chart pattern in the GBP\JPY, support is right on the 153.0 round number, and resistance is an ascending trendline with 3 bounces of price - strong trendline. This formation is also at a round support level which enforces the validity of the Support level. This is a reliable chart pattern, with high win-percentage, which usually reaches the projected target.

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