Wednesday, May 30, 2012

New short term trade - FTSE 100 short

I've taken a new short trade today on the hourly chart of the FTSE100 CFD.

The price has been trending down since 1st May and has formed a pattern within a pattern.

The first pattern is an inverted version of "Fibonacci Funnel" which is highlighted by the green lines.   This is a bearish pattern.   The second pattern is an ascending triangle (blue lines) which is normally a bullish pattern.   However, it has just broken to the downside and I take that as being bearish too.

Furthermore, there is a bearish divergence (purple lines) which adds to my edge.

The price may retreat into the funnel or up to the lower trend line of the triangle for a re-test (which is a common occurrence) before continuing it's downward trend...........but then again it may not!

In any event, my protective stop and profit take orders are in place.

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