Today I would like to talk all about the different types of reversal patterns & continuation patterns, this can be whether you are a swing trader or a day trader we all must look for signals such as these as they are solid confirmations for our trading ideas.
Forex reversal patterns are on chart formations which help in forecasting high probability reversal zones. These could be in the form of a single candle, or a group of candles lined up in a specific shape.
Types of Reversal Chart Patterns
There are two basic types of trend reversal patterns; the bearish reversal pattern and the bullish reversal pattern.
The Bullish reversal pattern forecasts that the current bearish move will be reversed into a bullish direction.
The Bearish reversal pattern forecasts that the current bullish move will be reversed into a bearish direction.
Double Top and Double Bottom
We will start with the Double Top reversal chart pattern. The pattern consists of two tops on the price chart. These tops are either located on the same resistance level, or the second top is a bit lower. The double top pattern typically looks like the letter “M”.
The Double Top has its opposite, called the Double Bottom. This pattern consists of two bottoms, which are either located on the same support level, or the second bottom is a bit higher. The double bottom pattern typically looks like the letter “W”.
Head and Shoulders
The Head and Shoulders pattern is a very interesting and unique reversal figure. The shape of the pattern is aptly named because it actually resembles a head with two shoulders.
The pattern forms during a bullish trend and creates a top – the first shoulder. After a correction, the price action creates a higher top – the head. After another correction, the price creates a third top, which is lower than the head – the second shoulder. So we have two shoulders and a head in the middle.
Of course, the Head and Shoulders reversal pattern has its inverted equivalent, which turns bearish trends into bullish. This pattern is referred to as an Inverted Head and Shoulders pattern.
Overall Reversal patterns are a key part in trading and especially useful for confirmations in your trade ideas. You may not always find reversal patterns but when you do you will know the best possible entries!
Thanks for taking the time to read my post! Please check out my other trade ideas! 😆😂😆😂😆😂😆😂
@TradingView, So much love ❤ Thanks for making the best platform to chart on!
sakena24
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everything here the market does the opposite. tgese are retail market structure typically easy for the eye (which 9-10 isnt good). thinking and knowing what the institutions do in cases when theses specific structures form, they induce the retail trader by allowing them to trade to a certain extent before trapping them by going the opposite direction (the direction the market intended to) see if these where that easy or thats the end all be all their would be a whole lot of millionaires. but these only attract your eye and is easy to be spotted.
try doing the opposite and stay in-line with the trend, impulse. there are only 2 real reversal patterns that aren't so easy to spot. but once familiar it becomes very easy
ecocomruiz360
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@sakena24 facts, by far the best trader is Daniel from chart champions, they don't BS like the other guys from cryptobusy
lcharles1001
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@sakena24, Yes! In an unregulated market we see a very random environment not fitting in static patterns.
Always appreciate excellent well prepared insight, Thank You!!
IncredibleIndia
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sorry ! your effort is very good to educate but These patterns are very outdated now some changes in these patterns is the reality of present. but I am following you because your effort is positive for every one.