IMPORTANT CHART PATTERNS TO KNOW!
The following chart patterns give both bullish and bearish signals:
Head & Shoulder
Inverted Head & Shoulder
Cup & Handle
Triple Top
Double Top
Ascending Triangle
Descending Triangle
Double Bottom Class I
Double Bottom Class II
Double Bottom Class III
Horizontal Pattern
Why are the patterns above both bullish and bearish? That is because the price rapidly changes during the pattern formation and gave fake signals and traps the traders to place a trade in the wrong direction. Therefore, new traders should learn to recognize fake signals to improve the profitability of a trade.
The neckline is a horizontal line that indicates a major price level. Once the neckline is touched the price may either move higher or lower significantly. An ascending flag is when the price trend higher, and a descending flag is when the price trend lower. An ascending triangle is when the trendline connecting the high price slope upward with a flat horizontal support price line. A descending triangle is when the trendline connecting the high price slope downward with a flat horizontal support price line.
Double bottom is classified into Class I, Class II, and Class III.
Class I - both left and right sides reached a bottom at around the same low price.
Class II - the left side reached a lower price level than the right side.
Class III - the right side reached a lower price level than the left side.
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Greenfield
