PLAYBOOK #16 / 25
CHART PATTERNS
Broadening Formations & Megaphone Patterns: Exploiting Expanding Volatility
Target Win Rate
63% - 69%
Target RRR
1:3.0 to 1:5.0
Execution Bias
BOUNDARY SWEEP REVERSAL
Best Markets
High-Beta Crypto & Tech
1. Market Psychology: Expanding Chaos & Liquidity Traps
Broadening formations (also called Megaphone tops/bottoms) feature diverging trendlines: higher highs paired with lower lows. This pattern indicates complete retail confusion and aggressive liquidity sweeps where both breakout buyers and breakdown sellers are repeatedly stopped out.
Institutional traders do not trade the breakout; they fade the boundary extremes when price sweeps the outer expanding trendline and prints strong rejection wicks.
2. Mean-Reversion Boundary Execution
- Entry: Enter on a Pinbar / Engulfing candle that wicks outside the expanding upper/lower channel and closes back inside.
- Stop Loss: 5 ticks beyond the extreme rejection wick.
- Target: The opposite boundary of the megaphone structure (frequently yielding 1:4+ RRR).
INSTITUTIONAL TRADE SPECIFICATION
Asset: ETH/USDT (4-Hour Chart) • Bias: Megaphone Upper Boundary Short
Entry: $3,580.00 • Stop Loss: $3,650.00 ($70.00 Risk)
Target 1: $3,440.00 (1:2.0 RRR) • Target 2: $3,300.00 (1:4.0 RRR)
Entry: $3,580.00 • Stop Loss: $3,650.00 ($70.00 Risk)
Target 1: $3,440.00 (1:2.0 RRR) • Target 2: $3,300.00 (1:4.0 RRR)
Target Win Rate
65% - 72%
Target RRR
1:3.0+
Execution Bias
CONFIRMATION