Rounding Top / Bottom Pattern Forex Trading Strategy
The Rounding Top / Bottom pattern forex trading strategy is a trading strategy that employs minor price swings that jumps and drops slowly, offering a dome shape at the top/bottom of the chart. The strategy will combine the X-Wave-elliot.ex4 and Winmaxpips.ex4 custom indicators in further supporting the signal.
MetaTrader4 Indicators: X-Wave-elliot.ex4 (default setting), Winmaxpips.ex4 (default setting)
Preferred Time Frame(s): Any
Recommended Trading Sessions: Any
Currency Pairs: Any
Buy Trade Example (Click the image for full size)
Long Entry Rules
Place a buy order if the following conditions or rules are on display:
- If the rounding bottom that is made up of minor price swings that dips and rises slowly, forming a dome shape at the bottom of the chart forms and further breaks above the high of the pattern as shown on Fig. 1.0, it is a signal that price is going bullish.
- If the Winmaxpips.ex4 custom indicator forms lime upward pointing arrows that are placed on yellow vertical bars above the 0.00 level, this is a bullish trigger.
Note that the X-Wave-elliot.ex4 custom indicator offers points on the activity that makes it easy to pinpoint lows, as well as highs, thus offering points that allows the easy plotting of the dome shape at the bottom of the chart.
Stop Loss for Buy Entry: Place stop loss below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit on position(s) if the following chart or indicator patterns are on display:
- If a rounding top price action pattern forms or any other reversal pattern (refer to our section on price action trading), it is an indication that the current trend is weaning.
- If the Winmaxpips.ex4 custom indicator yellow vertical bars carrying lime colored arrows recline towards the 0.00 level and subsequently forms a red downward pointing arrow, an exit or take profit should be considered.
- If the X-Wave-elliot.ex4 custom indicator forms a descending trend line, it is a sign that price is being pushed lower i.e. an exit or take profit is appropriate.
Sell Entry Rules
Place a sell if the following rules or conditions hold sway:
- If the rounding top that consist of minor price swings that rises and dips slowly, forming a dome shape at the top of the chart forms and further breaks below the low of the pattern as shown on Fig. 1.1, a sell is in order.
- If the Winmaxpips.ex4 custom indicator forms red downward pointing arrows that are placed on yellow vertical bars below the 0.00 level, a sell signal is right.
- If the X-Wave-elliot.ex4 custom indicator forms an ascending trend line, an exit or take profit is suited.
Stop Loss for Sell Entry: Place stop loss above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following chart or indicator patterns becomes visible:
- If a rounding bottom price action pattern forms or any other reversal pattern, exit or take profit accordingly.
- If the Winmaxpips.ex4 custom indicator yellow vertical bars carrying red colored arrows retraces towards the 0.00 level and subsequently forms a lime colored upward pointing arrow, an exit or take profit is needed.
- If the X-Wave-elliot.ex4 custom indicator forms an ascending trend line, it is a sign that price is pushing higher i.e. an exit or take profit will do.
About The Trading Indicators
The Rounding Top / Bottom price action pattern consists of minor swings that forms a dome shape at the top or bottom of the chart.
The X-Wave-elliot.ex4 is a technical study that plots high/low points on the chart, offering traders a visual picture of troughs and peaks in the market.
The Winmaxpips.ex4 indicator is commended for all types of trades, due to its ease of use. The Winmaxpips.ex4 is comprised of histograms that are formed from a middle 0.00 level. The histograms are usually formed either to the upside or downside. On the upside we have green arrows forming on the tips of the histogram, while on the downside, the indicator has red arrows on its tip.