Why is SFP Trading becoming the favorite among experienced traders?

Swing Failure Pattern – is a chart pattern that occurs when the price breaks through an important resistance or support level but fails to hold above ( or below ) and makes a sharp reversal. In other words, it’s a trap for beginners who catch the trend at the peak.

How to recognize SFP: key signs

The mechanics of this pattern are simple but effective. First, there is a breakout of a known price level – it triggers stop-losses of retail traders located above or below the zone. Then, a long wick remains on the chart, indicating a struggle between buyers and sellers. The price reverses and closes back inside the previous consolidation zone.

This entire process is usually accompanied by a sharp spike in trading volume – this is the main signal that something significant is happening in the market. SFP trading often marks a turning point: a local maximum is replaced by a decline or a local minimum is replaced by a rise with clear signs of a trend reversal.

Why do professionals prefer it?

The essence is simple: traders who are stuck in a wrong position and actively trigger stop-losses on the breakout become a source of liquidity and fuel for the development of the opposite trend. This is not mysticism or magic analysis – it’s pure demand and supply mechanics at the exchange level. Swing Failure Pattern works precisely because it identifies moments of maximum market disappointment.

Experienced traders use SFP as a signal to enter a counter-trend with a high probability of success.