In this article we are going to learn more about Swing Failure Pattern (SFP). Understand it all here!
What Is Swing Failure Pattern (SFP)
Swing Failure Pattern (SFP) is a type of reversal pattern used by (swing) traders to target a stop-loss above a key swing low or below a key swing high.
The goal of SFP is to create enough liquidity to change price direction. In the context of SFP, if at any point the price fails to reach a new high in an uptrend or a new valley in a downtrend, it becomes a sign of a pattern shift and a potential trend reversal.
Fungsi Swing Failure Pattern (SFP)
The main function of the Swing Failure Pattern (SFP) is to provide early signals about trend reversal. Traders use SFP to plan entry and exit points for trades.
In an uptrend, when an SFP occurs, a trader may decide to open a short position, while in a downtrend, a trader may choose to open a long position. By identifying SFP, traders can take advantage of potential changes in price direction.
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Contoh Swing Failure Pattern (SFP)
A concrete example of a Swing Failure Pattern (SFP) can be found in a situation where the price, in an uptrend, cannot reach a new high, or in a downtrend, the price cannot form a new valley.
In SFP, the trend line must successfully penetrate the previous high in a downtrend or the previous low in an uptrend to ensure pattern completeness. For example, experienced traders can utilize SFP to open short positions when an uptrend begins to weaken or open long positions when a downtrend shows signs of reversal.
Kesimpulan Swing Failure Pattern (SFP)
In conclusion, the Swing Failure Pattern (SFP) is a technical analysis tool that helps traders identify potential trend reversals. Understand that SFP occurs when prices fail to reach a new high or low in a particular trend.
The main function of SFP is to provide early warning of trend changes, allowing traders to plan their trading strategies. Therefore, understanding and recognizing these patterns can provide an edge in trading decision making and risk management.
Thus, the Swing Failure Pattern (SFP) becomes an important tool in technical analysis, helping traders to identify potential trading opportunities and increase success in managing their investment portfolio.
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Baca Juga:
What is Platform and Context with Cryptocurrencies?
What Are Investment Vehicles (Crypto-tied)?
DISCLAIMER: This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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