How PATTERNS help us MAKE MONEY| Education

We have many people who are just learning to trade, so I want to help you with this.
For professionals - Reminder.

THE IMPORTANCE OF PATTERNS

1) How to use Forex Patterns
Patterns are often found on the PICTURE chart, which are formed due to price movements. They are not easy for beginners to notice, but for professionals they are GOOD helpers in predicting prices.
The patterns can be roughly divided into "Bullish" and "BEARS".

"BULLISH" patterns are those patterns that tell us about the likely future price growth and allow us to determine the position to open a buy trade.

Rising "Triangle"
Trend continuation pattern. It is formed by a rising support line and a horizontal resistance line. It is worth opening a deal with this figure after the price breaks through the resistance and rolls back, fixing on the line.
Inverted "Head and Shoulders"
It is formed at the local lows of the chart during a downtrend. After the figure is fully formed, the price growth can be expected. The minimum amount of growth is determined by the height of the figure: the line from its base - "neck" - to the central top.
Double bottom
The pattern is very similar to the one described above. It is also a figure that changes the direction of the trend. This pattern predicts subsequent price increases. Minimum expected height: figure height. The ideal buy point is when the bottom line is broken. Those who do not want to take risks can wait for the price to fix on this line.
Flag
The entry point and trend direction are important for this pattern. In general, this pattern is similar to a channel, but its complete formation can be said only after the trend line is broken. "Bullish" Flag is formed in the course of breaking the uptrend line - where you should look for a purchase - and as a result continues it.
Pennant
Also called Symmetrical Triangle. Within this figure, the price movement "fades" - the oscillation frequency decreases. At the same time, the pattern is preceded by a strong price movement - in the “bullish” variant - growth. After the complete formation of the figure, the growth continues.
Wedge
The pattern forms at the highs of the uptrend and continues it. The boundaries are the support and resistance lines. The moment when the price breaks the resistance line can serve as a signal to open a trade. The amount of mining in this case is determined by the "height" of the base of the figure.


“BEARS” patterns are patterns that precede a price drop and indicate the possibility of opening a sell trade.

Descending "Triangle"
Such a triangle is formed by a descending resistance line and a horizontal - support. "Getting" into this figure, the price as a result changes the trend from upward to downward. Selling in this case is worth waiting for the price to fall behind the support line.
Head and shoulders
It is formed at the local highs of the chart when the price moves in an uptrend. After complete formation, the price can be expected to fall by the size of the pattern height. In this case, it is better to sell immediately after breaking through the base line or after fixing the price on the line.
Double top
As in the case of the previous example, this pattern indicates a probable change in the downtrend and opens up an opportunity to open a sell trade. For this it is worth watching when the price reaches the bottom line. After that, the price is expected to fall at least by the size of the pattern height.
Flag
In case of formation of the “Bearish” flag, the price is in a downtrend. We can say that it falls into a channel, which can be perceived as a correction to a fall. Then the price drops below the support line - which is the entry point for selling.
Pennant
As in the “bullish” variant in an uptrend, the Pennant is characterized by the presence of a “shaft” - a strong impulse. In this case, the price has fallen. After which the trading volumes decrease and the price fluctuations become less. The complete formation of the pattern can be considered completed after the price breaks the resistance line and continues the downtrend.
Wedge
The “bearish” wedge literally reflects its “bullish” variant - it forms at the highs of the chart in a downtrend. The deal is opened when the price breaks the support line.

We talked about the BASIC patterns in the Forex market. But, of course, not all of the existing ones are listed here. It is important to understand that patterns are not 100% guaranteed to rise or fall in price. There are many non-standard options for forming patterns and reading the chart. However, knowledge of the patterns can help in the technical analysis of FOREX charts.

What patterns would you like to know about? Write your suggestions in the comments, and I will take your opinion into account when I prepare the next article.