Kotak Mahindra Bank Limited
Education

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58
Limitations of Chart Patterns

False breakouts are common.

Patterns may be subjective—two traders may interpret them differently.

Market news can disrupt even perfect setups.

Patterns on lower timeframes are less reliable due to noise.

Therefore, traders often combine patterns with:

Moving averages

RSI

MACD

Volume analysis

Market structure

This improves accuracy.

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