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There is we have eleven important patterns that would use in your idea to know the best and knowledge direction,
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Eleven Most Important Patterns
1- Head and Shoulders Pattern
The Head and Shoulders pattern is an accurate reversal pattern that can be used to enter a bearish position after a bullish trend .
It consists of 3 tops with a higher high in the middle, called the head. The line connecting the 2 valleys is the neckline.
The height of the last top can be higher than the first, but not higher than the head. In other words, the price tried to make a higher high but failed.
The closer the 2 outer tops are to the same price, the more accurate the pattern.
In technical analysis , a head and shoulders pattern describes a specific chart formation that predicts a bullish - to - bearish trend reversal.
2- Inverse Head and Shoulders Pattern
An inverse head & shoulder pattern is comprised of three main components:
-After a long bearish trend , the price falls to a trough and subsequently rises to a peak
-The price again falls to form a second trough substantially below the initial low and rises again to the same peak
-The price falls for the third time but to the level of the first trough only before rising back to the same peak again
3- Double Top ( M ) Pattern
A double top is a reversal pattern that is formed after there is an extended move up.
The “tops” are peaks which are formed when the price hits a certain level that can’t be broken.
After hitting this level, the price will bounce off it slightly, but then return back to test the level again.
If the price bounces off of that level again, then you have a Double top!
4- Double Bottom ( W ) Pattern
The double bottom looks like the letter " W ". The twice-touched low is considered a support level .
The advance of the first bottom should be a drop of 10 % to 20 %, then the second bottom should form within 3 % to 4 % of the previous low, and volume on the ensuing advance should increase.
The double bottom pattern always follows a major or minor downtrend in a particular security, and signals the reversal and the beginning of a potential uptrend.
The double bottom is also a trend reversal formation, but this time we are looking to go long instead of short.
These formations occur after extended downtrends when two valleys or “bottoms” have been formed.
5- Triple Top Pattern
A Triple Top is a chart pattern that consists of three equal highs followed by a break below support.
The chart pattern is categorized as a bearish reversal pattern.
All three highs should be reasonably equal, well-spaced, and mark clear turning points to establish resistance.
The highs do not all have to exactly the same level but should be “close enough”.
If trading the pattern , a stop loss can be placed above resistance ( peaks ) . The estimated downside target for the pattern is the height of the pattern subtracted from the breakout point.
6- Triple Bottom Pattern
A Triple Bottom is a chart pattern that consists of three equal lows followed by a break above resistance.
The chart pattern is categorized as a bullish reversal pattern.
All three highs should be reasonably equal, well-spaced, and mark clear turning points to establish support.
The lows do not all have to exactly the same level but should be “close enough”.
7- Falling Wedge Pattern
When price breaks the upper trend line the security is expected to reverse and trend higher .
Traders identifying bullish reversal signals would want to look for trades that benefit from the security's rise in price .
The falling wedge pattern is a continuation pattern formed when price bounces between two downward sloping, converging trendlines .
It is considered a bullish chart formation but can indicate both reversal and continuation patterns–depending on where it appears in the trend.
8- Rising Wedge Pattern
This usually occurs when a security's price has been rising over time, but it can also occur in the midst of a downward trend as well.
The trend lines drawn above and below the price chart pattern can converge to help a trader or analyst anticipate a breakout reversal.
While price can be out of either trend line , wedge patterns have a tendency to break in the opposite direction from the trend lines .
9- Flag Pattern
a flag pattern , in technical analysis , is a price chart characterized by a sharp countertrend ( the flag ) succeeding a short-lived trend ( the flag pole ).
The flag pattern is used to identify the possible continuation of a previous trend from a point at which the price has drifted against that same trend. Should the trend resume, the price increase could be rapid, making the timing of a trade advantageous by noticing the flag pattern
10- Pennant Pattern
These Are continuation patterns where a period of consolidation is followed by a breakout used in technical analysis .
It's important to look at the volume in a pennant -the period of consolidation should have lower volume and the breakouts should occur on higher volume .
11- Consolidation Pattern
the technical term consolidation has a specific meaning:
a sideways pattern of price movement within a limited breadth of trading in which neither buyers or sellers can move price to any significant degree. This period of indecision is a third type of trend in addition to the uptrend and downtrend
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There is we have eleven important patterns that would use in your idea to know the best and knowledge direction,
I wish you will see this information as educational & informative.
Your Supported is Appreciated with a Like and Comment.
Eleven Most Important Patterns
1- Head and Shoulders Pattern
The Head and Shoulders pattern is an accurate reversal pattern that can be used to enter a bearish position after a bullish trend .
It consists of 3 tops with a higher high in the middle, called the head. The line connecting the 2 valleys is the neckline.
The height of the last top can be higher than the first, but not higher than the head. In other words, the price tried to make a higher high but failed.
The closer the 2 outer tops are to the same price, the more accurate the pattern.
In technical analysis , a head and shoulders pattern describes a specific chart formation that predicts a bullish - to - bearish trend reversal.
2- Inverse Head and Shoulders Pattern
An inverse head & shoulder pattern is comprised of three main components:
-After a long bearish trend , the price falls to a trough and subsequently rises to a peak
-The price again falls to form a second trough substantially below the initial low and rises again to the same peak
-The price falls for the third time but to the level of the first trough only before rising back to the same peak again
3- Double Top ( M ) Pattern
A double top is a reversal pattern that is formed after there is an extended move up.
The “tops” are peaks which are formed when the price hits a certain level that can’t be broken.
After hitting this level, the price will bounce off it slightly, but then return back to test the level again.
If the price bounces off of that level again, then you have a Double top!
4- Double Bottom ( W ) Pattern
The double bottom looks like the letter " W ". The twice-touched low is considered a support level .
The advance of the first bottom should be a drop of 10 % to 20 %, then the second bottom should form within 3 % to 4 % of the previous low, and volume on the ensuing advance should increase.
The double bottom pattern always follows a major or minor downtrend in a particular security, and signals the reversal and the beginning of a potential uptrend.
The double bottom is also a trend reversal formation, but this time we are looking to go long instead of short.
These formations occur after extended downtrends when two valleys or “bottoms” have been formed.
5- Triple Top Pattern
A Triple Top is a chart pattern that consists of three equal highs followed by a break below support.
The chart pattern is categorized as a bearish reversal pattern.
All three highs should be reasonably equal, well-spaced, and mark clear turning points to establish resistance.
The highs do not all have to exactly the same level but should be “close enough”.
If trading the pattern , a stop loss can be placed above resistance ( peaks ) . The estimated downside target for the pattern is the height of the pattern subtracted from the breakout point.
6- Triple Bottom Pattern
A Triple Bottom is a chart pattern that consists of three equal lows followed by a break above resistance.
The chart pattern is categorized as a bullish reversal pattern.
All three highs should be reasonably equal, well-spaced, and mark clear turning points to establish support.
The lows do not all have to exactly the same level but should be “close enough”.
7- Falling Wedge Pattern
When price breaks the upper trend line the security is expected to reverse and trend higher .
Traders identifying bullish reversal signals would want to look for trades that benefit from the security's rise in price .
The falling wedge pattern is a continuation pattern formed when price bounces between two downward sloping, converging trendlines .
It is considered a bullish chart formation but can indicate both reversal and continuation patterns–depending on where it appears in the trend.
8- Rising Wedge Pattern
This usually occurs when a security's price has been rising over time, but it can also occur in the midst of a downward trend as well.
The trend lines drawn above and below the price chart pattern can converge to help a trader or analyst anticipate a breakout reversal.
While price can be out of either trend line , wedge patterns have a tendency to break in the opposite direction from the trend lines .
9- Flag Pattern
a flag pattern , in technical analysis , is a price chart characterized by a sharp countertrend ( the flag ) succeeding a short-lived trend ( the flag pole ).
The flag pattern is used to identify the possible continuation of a previous trend from a point at which the price has drifted against that same trend. Should the trend resume, the price increase could be rapid, making the timing of a trade advantageous by noticing the flag pattern
10- Pennant Pattern
These Are continuation patterns where a period of consolidation is followed by a breakout used in technical analysis .
It's important to look at the volume in a pennant -the period of consolidation should have lower volume and the breakouts should occur on higher volume .
11- Consolidation Pattern
the technical term consolidation has a specific meaning:
a sideways pattern of price movement within a limited breadth of trading in which neither buyers or sellers can move price to any significant degree. This period of indecision is a third type of trend in addition to the uptrend and downtrend
Please like the idea for Support & Subscribe for More ideas like this and share your ideas and charts in Comments Section..!!
Thanks for Your Love & Support..!!
