The GBP/USD is looking like there is going to be another bullish extension in the trend. I am looking for price to retrace into the purple zone, then getting long to ride the extension up to the green zone. My stops will be below the red line and the risk profile looks to be about 2x reward to 1x risk.
I will be looking for an entry signal on the 4-hour chart once price hits the purple zone. The entry signals I use are double bottoms and engulfing bars with RSI confirmation. For the double bottom, the first bottom of the pattern must have a lower RSI value (less than 20) than the second bottom. For the engulfing bar entry, I need to see RSI below 20 before the engulfing bar forms.
I will be looking for an entry signal on the 4-hour chart once price hits the purple zone. The entry signals I use are double bottoms and engulfing bars with RSI confirmation. For the double bottom, the first bottom of the pattern must have a lower RSI value (less than 20) than the second bottom. For the engulfing bar entry, I need to see RSI below 20 before the engulfing bar forms.