Round Patterns

A reversal from a long-term price movement on Forex can be sharp and sudden or smooth and extended.

A rounding top is a visual pattern on a price chart that covers a long period of time and indicates a reversal of the market in favour of bearish trends.

What Can You See in a Rounding Chart?

Distinguishing patterns on a price chart allow traders to react to changes in market trends swiftly. Timely reaction brings a profit and a positive experience, which strengthens their trading strategy.

• The rounded top pattern indicates that buyers gradually reduce their pressure, giving way to sellers. That is why this pattern is best suited for the short selling technique. It indicates that now is the time to exit the long position.
• An inverted rounding top U-shaped figure indicates the exact opposite. The asset price has finished falling and is expected to rise in the near future. Therefore, if you buy the currency now, you will be able to sell it later at a higher price.

Advantages of the Rounding Top Chart Pattern

• This shape is obvious, so even a newbie in trading will be able to recognize it.
• The bearish trend that follows the rounding top chart pattern will be significant and long-lasting. Therefore, you will have enough time to implement your trading strategy.
• This pattern works in both directions, so it allows you to predict a reversal in favor of a bullish trend. In this case, it is called rounding bottom.

The Bottom Line

Knowing how to interpret the chart for rounding, you will always be able to predict a trend reversal and open the right position. Also, keep in mind that trading success depends on the correct prediction and on the speed of order execution. Using Forex VPS hosting services from MyForexVPS, you will get lightning-fast execution of your orders and a host of other competitive advantages.