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Classic technical analysis is one of the best analyzes for finding a buy or sell opportunity So I drew some of the most common technical drawings used in the analysis.
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1 ) What Is a Head And Shoulders Pattern? A head and shoulders pattern is a chart formation that appears as a baseline with three peaks, the outside two are close in height and the middle is highest. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end.
* A head and shoulders pattern is a technical indicator with a chart pattern described by three peaks, the outside two are close in height and the middle is highest. * A head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. * The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns.
2 ) What is Inverse Head And Shoulders? An inverse head and shoulders, also called a "head and shoulders bottom", is similar to the standard head and shoulders pattern, but inverted: with the head and shoulders top used to predict reversals in downtrends. This pattern is identified when the price action of a security meets the following characteristics: the price falls to a trough and then rises; the price falls below the former trough and then rises again; finally, the price falls again but not as far as the second trough. Once the final trough is made, the price heads upward, toward the resistance found near the top of the previous troughs.
3-4 ) What is a Sideways Trend? A sideways trend is the horizontal price movement that occurs when the forces of supply and demand are nearly equal. This typically occurs during a period of consolidation before the price continues a prior trend or reverses into a new trend. A sideways price trend is also commonly known as a "horizontal trend."
* A sideways trend is the horizontal price movement of a stock between resistance and support levels that occurs when the forces of supply and demand are balanced. * Traders can profit from sideways trends in several ways, from looking for confirmations of a breakout or breakdown to using stock options to placing stop-loss orders when the price nears resistance levels.
4 ) What is a Descending Triangle? A descending triangle is a bearish chart pattern used in technical analysis that is created by drawing one trend line that connects a series of lower highs and a second horizontal trend line that connects a series of lows. Oftentimes, traders watch for a move below the lower support trend line because it suggests that the downward momentum is building and a breakdown is imminent. Once the breakdown occurs, traders enter into short positions and aggressively help push the price of the asset even lower.
4-5 ) What is an Ascending Triangle? An ascending triangle is a chart pattern used in technical analysis. It is created by price moves that allow for a horizontal line to be drawn along the swing highs, and a rising trendline to be drawn along the swing lows. The two lines form a triangle. Traders often watch for breakouts from triangle patterns. The breakout can occur to the upside or downside. Ascending triangles are often called continuation patterns since the price will typically breakout in the same direction as the trend that was in place just prior to the triangle forming.
7 ) What is a Descending Channel? A descending channel is drawn by connecting the lower highs and lower lows of a security's price with parallel trendlines to show a downward trend. Officially, the space between the trendlines is the descending channel, which falls under the broad category of trend channels.
8 ) What Is Rising (Or) Ascending Channel Chart Pattern? As you can notice the rising channel pattern moves upwards, it is also called as Bullish Channel pattern. It comprises of two lines parallel to each other with points shaping higher highs and higher lows therefore consequential in bullish channel or upside channel. The price is limited between the two trend lines.
9 ) Support and resistance role reversal A key concept of technical analysis is that when a resistance or support level is broken, its role is reversed. If the price falls below a support level, that level will become resistance. If the price rises above a resistance level, it will often become support. As the price moves past a level of support or resistance, it is thought that supply and demand has shifted, causing the breached level to reverse its role.
nothing of that works and it is the perfect trap that big banks use to take your money with hunting stops. try this with a forex simulator or tradingview candle by candle to realize it will have no impact on success longterm. flip a coin and have a tight money management = same result as working with lines.
BigSte
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@minnox, If day trading / swing trading were easy everyone would be doing it. Spotting these patterns (or more to the point knowing when your not spotting the patterns) is a skill to practice. They are not infallible but do help with confidence about a trade. Combined with skilled use of 'STOPS', LIMITS etc. They can turn your 50/50 chances of gains into 60/40, in your favour, or better.
By LEARNING this skill (with at least a trading course and a month paper trading) you can stop worrying about the big banks conspiracy theories. Unfortunately you will be giving a lot more of your hard earned to the taxman :(
Saeed966
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@minnox It seems that you do not know what the basics of technical analysis are, not even the patterns of technical analysis. This is a great science that has been used for thousands of years and the great speculator is working on it
minnox
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@Saeed966, i am past the basics already... everything with lines is useless for trading. patterns dont work! just with historical data as a picture book, but not in real time. they key is not to trade like the popular traders.