Unveiling the Figo Bearish Arc: A Powerful Reversal Pattern

Welcome to Figo Trader, your go-to source for innovative trading strategies and market insights. Today, we're excited to introduce a unique and potent chart pattern: the Figo Bearish Arc. This pattern can be a game-changer for traders looking to identify bearish reversals after a strong bullish trend.

What is the Figo Bearish Arc?

The Figo Bearish Arc is a technical analysis pattern that forms at the end of a bullish move. It represents a gradual depletion of bullish momentum, leading to a potential reversal. Understanding and identifying this pattern can help traders capitalize on bearish trends with higher accuracy.

Characteristics of the Figo Bearish Arc

1. Formation:

   • The pattern emerges at the end of an extended bullish move.

   • Price action forms a noticeable arc as the upward momentum fades.

2. Key Points:

   • The arc formation completes when the price hits a significant resistance level or sell zone.

   • Additional bearish signals, like triple tops or double tops, often accompany the pattern, providing further confirmation.

3. Appearance:

   • The Figo Bearish Arc resembles a downward-facing arc on the price chart.

4. Volume Behavior:

   • Volume typically decreases as the price rises within the arc, indicating weakening bullish momentum.

   • A surge in volume during the breakdown from the arc suggests increasing bearish pressure.

5. Timeframe:

   • This pattern can appear on various timeframes, making it versatile for different trading strategies. The example provided here uses a 15-minute chart for the Volatility 75 Index.

Identifying the Figo Bearish Arc

To spot the Figo Bearish Arc, look for these signs:

• A smooth, rounded top forming after a bullish trend.

• A key resistance level where the price struggles to break higher.

• Confirmation signals such as triple tops or double tops within the arc.

Trading the Figo Bearish Arc

Once identified, the Figo Bearish Arc provides clear entry and exit points:

1. Entry Point:

   • Enter a short position as the price breaks down below the arc, ideally confirmed by breaking a key support level.

2. Stop Loss:

   • Place a stop loss above the recent highs within the arc to manage risk effectively.

3. Take Profit Targets:

   • Aggressive Target: Set the take profit at the full height of the arc.

   • Conservative Target: Opt for a take profit at 50% of the arc’s height, offering a safer exit strategy.

Example: Volatility 75 Index

The image in this post illustrates the Figo Bearish Arc on a 15-minute chart of the Volatility 75 Index. The red arc shows the gradual loss of bullish momentum, while the blue arrows indicate the expected bearish move post-breakdown. Gray support and resistance levels highlight potential price action areas.

Conclusion

The Figo Bearish Arc is a powerful tool for traders aiming to identify bearish reversals after a strong bullish trend. By understanding its characteristics and leveraging its predictive power, you can enhance your trading strategy and improve your market performance.

Stay tuned to Figo Trader for more innovative trading strategies and market insights. Happy trading!