Chart patterns are visual representations of a stock's price movement over time. These patterns can provide traders with information about the stock's trend, momentum, and potential future direction. Continuation and reversal patterns are two types of chart patterns that traders use to identify potential entry points. When considering entry points for both continuation and reversal patterns, traders often use a combination of technical indicators and price action analysis. They may use tools such as moving averages, oscillators, and trendlines to confirm a pattern's validity and identify potential entry points. Additionally, traders may set stop-loss orders to manage risk and limit potential losses.
🔹 Continuation patterns Continuation patterns are chart patterns that suggest that the current trend will continue. They occur when the stock price consolidates in a certain range, showing a temporary pause in the trend. Some common continuation patterns include triangles, flags, and pennants. Traders may look to enter a long position when the stock price breaks out of the pattern, typically on higher than average trading volume.
🔹 Reversal patterns Reversal patterns, on the other hand, suggest that the current trend is likely to reverse. These patterns occur when the stock price has reached a high or low point and is likely to move in the opposite direction. Some common reversal patterns include head and shoulders, double tops and bottoms, and the "V" pattern. Traders may look to enter a short position when the stock price breaks below a support level or the neckline of a pattern.
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@AlgoBuddy Please I need this cheatsheet. How can I get it ??? If has PDF, that's be better.
Tolberti
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Nice graphics, I like it!
Neroumaru
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The RR (RISK/REWARD ratio) - meaning the distance of stop loss looks very poor for me according to these. In some cases, the TP is closer than SL, which is not normal.
QuantVue
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@Neroumaru, Might be whatever your screen dimensions are. Happens sometimes when publishing this type of content. Looks normal on our end.
ProjectSyndicate
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let's see what we get setup looks reasonable to me
Gold-Tech
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I agree with the priority. We will keep an eye on the market
If has PDF, that's be better.