M and W Price Patterns
M and W price patterns are price action patterns that traders use to make good profit when trading Forex or Volatility Index assets.
The M and W price patterns is also known as Double To, Double Bottom patterns.
Basically, trading Forex or Volatility Index assets with these type of patterns is not indicator based (free of indicators).
M and W price patterns occur mostly whenever price forms a top or a bottom swing/turning point.
Whenever M and W pattern forms at the support or resistance area, it normally gives high probability trade.
However, when trading divergence, and you observe the formation of M or W pattern, your confidence level on the potential trade will increase.
You can find these patterns on all time frames.
This pattern don’t appear all the time on the trading chart, but when it does, be rest assured of a nice trade setup.
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For newbies or inexperienced traders that may find it difficult to spot the patterns, you may use Zig Zag indicator with the following settings:
Buy (Long) Scenario:
Whenever there is a formation of the following three turns; Low, High and Low in a downtrend, this forecasts that the downtrend may likely end.
A breakout of the High usually indicate that price may likely go up.
Stop loss may be placed a little below the low. While take profit will be at the nearest resistance or you may trail your profit.
There are situations where Higher Lows and Lower Lows are formed. See below below image;
Sell (Short) Scenario:
On the other hand, the formation of the following three turns ; High, Low and High in an uptrend, will forecast that the uptrend price movement is about to end.
Stop loss may be placed a little above the high. While take profit will be at the nearest support or you may trail your profit.
There are instances where Higher Highs and Lower Highs are formed. See below below image;
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