Swing Failure Pattern (Sfp)
| Swing Failure Pattern (SFP) is a reversal pattern in which traders aim for stop-losses above (or below) a major swing low (or high) in order to generate enough liquidity to drive the price in the other direction. SFP is a very popular pattern among traders because it is relatively easy to identify and trade. The key to trading SFP is to wait for a clear signal before entering the market. There are two main types of SFP: 1. Bullish SFP 2. Bearish SFP Bullish SFP occurs when the market is in a downtrend and traders are looking for a reversal to the upside. Bearish SFP occurs when the market is in an uptrend and traders are looking for a reversal to the downside. The key difference between the two types of SFP is the location of the stop-loss. For a bullish SFP, the stop-loss is placed below the major swing low. For a bearish SFP, the stop-loss is placed above the major swing high. Once the stop-loss is in place, traders will wait for the market to move in their favor before exiting the trade. SFP is a great pattern for traders who are looking for a quick and easy way to enter the market. However, it is important to remember that SFP is a reversal pattern and the market can move against you if you are not careful. If you are thinking about trading SFP, make sure you do your homework and understand the risks involved. |
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