A Triple Top at yesterday’s EUR/USD chart was proven a false forex signal when I shorted Euro. Trading the popular currency pair during morning led me to predict a promising downtrend as I sold 2 lots at 1.4625. However the currency rate penetrated the resistance level and climbed close to 1.4650, hitting my stop loss of 15 pips that cost me more than $300. 4 hours later (8:30 EST) when the daily important forex news came into play, EUR/USD rate failed to reach higher prices and collapsed to 1.4475. That was more than 125 pips move of the currency pair in favor of my initial trade, but I was already out of the forex market. Adding up the $2,500 profit I would make, that forex signal cost me almost $3,000.
Triple Top or Bottom is regarded as a quite significant forex signal when trading Euro, British Pound or the Japanese Yen. The chart formation points out the weight of the resistance or support level respectively and as the price fails to overcome that level, it is a great opportunity to enter a trade. Additionally, MACD was trending downwards while the currency pair’s rate was obviously trending sideways, offering one more excuse to go short on EUR/USD. However the single most decisive forex signal that screamed of an imminent downtrend has been the previous support level that had now become resistance in the hourly forex chart of Euro.
In the end Euro fell to the S2 pivot point of the day where forex traders could secure their profits and trade out. If only I hadn’t closed my position, but I prefer sticking to my trading rules and stop loss, than trapping myself in a reversal.