The Megaphone Pattern on the Daily Timeframe: The Hidden Formula That Only Experts Use

The Trading Pattern That’s Screaming Profits (Literally)
Picture this: You’re in a crowded market, and someone starts yelling louder and louder—first a whisper, then a murmur, then a full-blown scream. That’s exactly what happens in the Forex market when you spot the megaphone pattern on the daily timeframe. Prices swing wildly, highs get higher, lows get lower, and traders either capitalize on the volatility or get caught like a deer in headlights.
Today, we’re diving into the megaphone pattern—a rare but highly potent formation that smart traders use to outmaneuver the market. But be warned: Most traders get this wrong. If you think it’s just another symmetrical triangle or wedge, you might as well be trying to trade Fibonacci levels with a ruler and a lucky charm.
What is the Megaphone Pattern? (And Why It’s Not Just a Fancy Name)
The megaphone pattern, also known as the broadening formation, is characterized by a series of higher highs and lower lows, creating a structure that resembles, well, a megaphone. But don’t be fooled by its simplicity—this pattern reveals powerful psychological battles between buyers and sellers.
Key Features of a Megaphone Pattern:
✅ Higher highs and lower lows expand over time.
✅ Increased volatility as price action plays out.
✅ Can signal both reversals and trend continuations.
✅ Usually occurs in uncertain market conditions (think major economic events, elections, central bank policy shifts).
Why Most Traders Misinterpret the Megaphone Pattern
Most traders make one of two mistakes:
- They assume it’s a breakout pattern too early. Jumping in too soon without confirmation can lead to premature stop-outs.
- They think it’s random noise. Because it’s so volatile, many traders ignore the pattern altogether—missing golden trading opportunities.
Here’s where smart traders shine. By using the daily timeframe, they filter out the market noise and focus on high-probability setups.
How to Trade the Megaphone Pattern on the Daily Timeframe
1. Identify the Pattern Correctly
???? Look for at least three higher highs and three lower lows forming an expanding structure.
???? Use trendlines to connect these swings, ensuring the price forms a broadening wedge.
???? Confirm the pattern with volume spikes—higher volatility means the pattern is legitimate.
2. Choose Your Entry Points Wisely
???? Breakout Traders: Wait for a clear breakout with high volume. Enter once price retests the breakout level.
???? Reversal Traders: Enter at the edges—buy near support (lower boundary), sell near resistance (upper boundary). Use additional confirmation signals like RSI divergence.
3. Manage Risk Like a Pro
???? Stop-loss placement is key! If you’re trading the reversal, place stops outside the megaphone boundaries. If you’re trading the breakout, position stops below the breakout level to avoid whipsaws.
4. Take Profit Like a Market Ninja
???? First target: The midpoint of the pattern (50% retracement of the last move).
???? Second target: The opposite boundary (high or low of the pattern).
???? Final target: Measure the height of the pattern and project it beyond the breakout.
Real-World Example: Megaphone Pattern in Action
Let’s look at GBP/AUD. In late 2023, the pair formed a textbook megaphone pattern on the daily timeframe. Traders who waited for a confirmed breakout saw a massive 500-pip move—a jackpot for those who understood the pattern’s dynamics.
Advanced Tips: Secret Weapons for Megaphone Pattern Traders
???? Use ATR (Average True Range) for Stop-Loss Placement – ATR helps adjust your stop-loss according to volatility, preventing premature stop-outs.
???? Watch for Fundamental Triggers – News events like Fed announcements or NFP reports often fuel megaphone breakouts.
???? Combine with Divergence Indicators – RSI or MACD divergence near the edges of the pattern can confirm reversals before the breakout happens.
Final Thoughts: Are You Ready to Trade Like an Insider?
The megaphone pattern on the daily timeframe is an elite trading strategy that separates professionals from amateurs. It offers high-reward opportunities—but only for those who approach it with precision.
Want to master these setups with expert insights and real-time alerts? Join the StarseedFX community today!
???? Get real-time market updates: StarseedFX Forex News
???? Level up your skills: Free Forex Courses
???? Access expert strategies: Join the Community
???? Track and optimize your trades: Free Trading Journal
—————–
Image Credits: Cover image at the top is AI-generated
PLEASE NOTE: This is not trading advice. It is educational content. Markets are influenced by numerous factors, and their reactions can vary each time.

Anne Durrell & Mo
About the Author
Anne Durrell (aka Anne Abouzeid), a former teacher, has a unique talent for transforming complex Forex concepts into something easy, accessible, and even fun. With a blend of humor and in-depth market insight, Anne makes learning about Forex both enlightening and entertaining. She began her trading journey alongside her husband, Mohamed Abouzeid, and they have now been trading full-time for over 12 years.
Anne loves writing and sharing her expertise. For those new to trading, she provides a variety of free forex courses on StarseedFX. If you enjoy the content and want to support her work, consider joining The StarseedFX Community, where you will get daily market insights and trading alerts.
Share This Articles
Recent Articles
The GBP/NZD Magic Trick: How Genetic Algorithms Can Transform Your Forex Strategy
The British Pound-New Zealand Dollar: Genetic Algorithms and the Hidden Forces Shaping Currency Pairs
Chande Momentum Oscillator Hack for AUD/JPY
The Forgotten Momentum Trick That’s Quietly Dominating AUD/JPY Why Most Traders Miss the Signal
Bearish Market Hack HFT Firms Hope You’ll Never Learn
The One Bearish Market Hack High Frequency Traders Don't Want You to Know The