Bearish Pattern - Horizontal Resistance
A bearish continuation pattern that signals the continuation of a downtrend after a brief consolidation period.
Pattern Overview
It is a YC bearish, trend continuation pattern, widely present in technical analysis literature. Wait for at least two valid bounces and a clean structure before planning entry.
Entry Point: Initiate a bearish trade when price nears established horizontal resistance. At point C below line A.
Risk Management: Position a stop loss above the resistance line. Above line A.
Formation
Wait for at least two valid bounces and a clean structure before planning entry.
10% Alert: Triggered when the price retraces 90% of the distance from recent low (Point D) to previous resistance on line A.
5% Alert: Triggered when the price retraces 95% of the same distance (Point D to line A).
Signal Confirmation
A bearish setup is confirmed after breakdown and controlled retest near the key level. Place stop loss above invalidation.
Entry Point: Initiate a bearish trade when price nears established horizontal resistance. At point C below line A.
Risk Management: Position a stop loss above the resistance line. Above line A.
Historical Performance
Historical cases show meaningful downside when confirmation and risk management are respected.
Some Examples
