In this example the market rallies up 80 pips but is unable to retrace back to the 38% level. Normally this is a sign of extreme strength and we want to skip the first fibonacci target level and trade at the second one. In this particular example the market had rallied up about 78 pips before this 80 pip second wave.

The longer the market SWING the more likely the first 1.382 Fibonacci Profit Target will be Resistance

In this case we short and the market falls 20 pips, rallies back up giving us an opportunity to again short at the double top! When markets are strongly trending they often hit and reverse off these Fib target levels. They then often double top there giving us the opportunity to catch bigger pip moves. What I often do is take a quick 10 pip profit on the first trade and look for 20 to 30 on the second one after double top has formed and all traders who are long start to panic and sell. Professional traders are then looking for support to form before buying again and this can be 30 to 80+ pips lower.

It then proceeds to fall 80 pips!



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