These are actual trades from our Trading System.
On June 28, 2024, Crude Oil experienced a breakout from a tight congestion zone that had formed over seven days, marked by an overnight gap up. After an initial advance over the first three candles, a Bearish Engulfing pattern (Bearish Setup 1) appeared on the fourth candle (C4), signalling a potential breakout failure and a sell opportunity.
The trade made a neat profit as the price dropped rapidly by over 100 points in the next two candles (C5 and C6), closing the overnight gap.
Breakouts from prolonged congestion zones often fail due to crowd participation. When such a breakout fails, traders caught on the wrong side are forced to liquidate their positions, adding momentum to the reversal. Monitoring for failures of breakouts or breakdowns from significant ranges or chart patterns can lead to high-probability trades.
In the coming days, the price is likely to test the lower boundary of the congestion zone around 6710. Please refer to the chart annotations for detailed insights.
(Fig 1.1 - Failed breakout on Crude Mini Futures)
Silver broke out of a small Reverse Head & Shoulders pattern on 28th of Jun, 2024 that had formed over the last 2 days. It subsequently formed a big Reverse Hammer (Bearish Setup 2) on C5 signalling a failed breakout and a sell opportunity.
The price descended fiercely on C6, going below the neckline before recovering to close near the neckline. It was a big trade wherein silver lost 800 points over a single candle. Please refer to the chart annotations for detailed insights.
(Fig 1.2 - Failed breakout on Silver Micro Futures)
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