A Bearish Gartley Pattern is seen in the FTSE

We have seen a great run in the FTSE since the drop in the value of GBP which has been accompanied by an upwards trend in most index’s around the world. But after the recent run-up and the continued strengthening of GBP, we could be seeing a reversal point.

We have now seen all points on the Gartley pattern complete which indicates a reversal of trend and a retracement of 38.2 - 61.8% of the CD distance. As the market in currently strongly trending upwards, many technical traders would look to place a tight stop loss as any break above this level would indicate a further move upwards.

As the market has created this pattern multiple times with a strong trend some traders may opt to use a trailing stop so that even if the reversal is short lived and the trend resumes a small profit or a minimised loss can be realised.

These types of trading opportunities can offer great risk to reward ratios such as this example giving over 6:1.

 

Happy Trading

Alexander Flood

Technical Analyst

www.fxtradingstrategies.net

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