Identifying the patterns will help you to predict the move correctly.
If you identified the pattern correctly means, your half of the work was done to predict the next move.
In above, there are three basic patterns are drawn.
Those are all most repeated patterns in the market.
1. reversal pattern.
This pattern used to form after an impulse. Most of the time it will reverse the trend.
Formally, the impulse directs a correction in a closed consolidation chamber. the consolidation should be wide at the start and narrow at the end. (shown in the graph)
At a certain point, the signals will break the trend/consolidation chamber with the help of impulse to form a flag to reverse the pattern.
ADD-ON: For trading, wait for the breakout confirmation and decide your trade.
2. reversal pattern.
In that, an impulse heads the correction in a parallel chamber. The signal travelled evenly inside the chamber.
At a particular point, it forms an impulse to get out from the chamber and from a flag to shift the pattern.
FOR TRADE: wait for the breakout confirmation.
3. trend continuation pattern.
The impulse leads to a correction and hosting the flag in sideways to continue with the previous trend.
here the first impulse will break the support to continue with the trend.
FLAG FORMATION TREND CONTINUATION PATTERN.
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