Forex Chart Pattern On Gbp Jpy

GBP/JPY has been one of the popular currency pairs among traders because of its volatility and potential profit. In forex trading, chart patterns play an essential role in predicting the market’s movement, including GBP/JPY. In this article, we will discuss the chart patterns that frequently occur on GBP/JPY and how to trade them.

What is Chart Pattern?

A chart pattern is a visual representation of the price movement in a chart. It helps traders to identify the market’s trend and predict the potential price movement. There are two types of chart patterns, which are continuation and reversal patterns.

Continuation Patterns on GBP/JPY

Continuation patterns suggest that the market is taking a pause before continuing its previous trend. The following are the continuation patterns that often occur on GBP/JPY:

Flag and Pennant Patterns

Flag and pennant patterns occur when the market has a sharp movement followed by consolidation. The flag pattern has a rectangular shape, while the pennant pattern has a triangular shape. Both patterns suggest that the market will continue its previous trend.To trade this pattern, traders can enter a buy position when the price breaks the flag or pennant’s resistance level. They can place a stop loss below the flag or pennant’s support level.

Ascending and Descending Triangle Patterns

Ascending and descending triangle patterns occur when the market has higher lows and lower highs, respectively. These patterns suggest that the market will continue its previous trend.To trade this pattern, traders can enter a buy position when the price breaks the triangle’s resistance level. They can place a stop loss below the triangle’s support level.

Reversal Patterns on GBP/JPY

Reversal patterns suggest that the market is changing its previous trend. The following are the reversal patterns that often occur on GBP/JPY:

Head and Shoulders Pattern

The head and shoulders pattern occurs when the market has three peaks, with the middle peak higher than the other two. This pattern suggests that the market will change its previous trend.To trade this pattern, traders can enter a sell position when the price breaks the pattern’s neckline level. They can place a stop loss above the pattern’s head level.

Double Top and Double Bottom Patterns

Double top and double bottom patterns occur when the market has two peaks or two troughs, respectively, at the same level. These patterns suggest that the market will change its previous trend.To trade this pattern, traders can enter a sell position when the price breaks the double top’s support level or enter a buy position when the price breaks the double bottom’s resistance level. They can place a stop loss above the double top’s resistance level or below the double bottom’s support level.

FAQ

What is GBP/JPY?GBP/JPY is a currency pair that represents the British Pound against the Japanese Yen.What is forex trading?Forex trading is the act of buying and selling currencies to make a profit.What is a chart pattern?A chart pattern is a visual representation of the price movement in a chart.

Conclusion

Chart patterns are essential tools in forex trading to predict the market’s trend and potential price movement. Continuation patterns suggest that the market will continue its previous trend, while reversal patterns suggest the market will change its previous trend. GBP/JPY has several chart patterns that frequently occur, such as flag and pennant, ascending and descending triangle, head and shoulders, and double top and double bottom. By understanding and trading these patterns correctly, traders can maximize their profit potential. Terima kasih sudah membaca artikel ini. Silahkan baca artikel lainnya.