The plan was to do a series of posts on popular chart patterns as well as advanced chart patterns we use in Camelot. We did this earlier in the year so we're sharing it again, also as a reminder for us to continue with this in the new year as a series of educational posts to help traders in their day to day trading. There are many ways to trade patterns, structures, support and resistance levels, we're showing you how we do it.
Followers of KOG will know we are technical traders so we are always looking out for candlestick and chart patterns as part of our trading plans and analyses.
These are what we feel the 6 most common and basic chart patterns that you will find almost daily on the smaller time frames. During the course of this series we will look at each and everyone in more detail and give you live examples of how they work.
TIP: When trading chart patterns its always best to wait for the neckline of the pattern to break, this confirms the movement in the chosen direction. Chart patters also work best at key levels of support and resistance and at the top or bottom of trends. For example, if you see the price is at the top of the trend and a Head and Shoulders pattern is forming, this is the first sign of a reversal on price.
1) Always wait for the pattern to form and ensure its clear!
2) Wait for the break of the neckline
3) Breakouts usually occur with aggressive candles that are volume driven
4) Your first target should always be the nearest KEY support or resistance level, this ensures some profit is locked in and this is where you take a majority of the trade off the table, then leave a small runner for your target area
5) In most cases you will get a retest of the neckline, this is usually the best entry
Chart patterns are helpful in determining the direction of the instrument and most are reliable. When markets are ranging or we are in pre-event price action, for example before FOMC or NFP, you need to remain cautious when trading patterns. During these market environments you will likely see contradicting patterns as well as patterns inside patterns so know when to trade patterns and when not to!
Hope this helps traders.
As always, trade safe.
KOG
Followers of KOG will know we are technical traders so we are always looking out for candlestick and chart patterns as part of our trading plans and analyses.
These are what we feel the 6 most common and basic chart patterns that you will find almost daily on the smaller time frames. During the course of this series we will look at each and everyone in more detail and give you live examples of how they work.
TIP: When trading chart patterns its always best to wait for the neckline of the pattern to break, this confirms the movement in the chosen direction. Chart patters also work best at key levels of support and resistance and at the top or bottom of trends. For example, if you see the price is at the top of the trend and a Head and Shoulders pattern is forming, this is the first sign of a reversal on price.
1) Always wait for the pattern to form and ensure its clear!
2) Wait for the break of the neckline
3) Breakouts usually occur with aggressive candles that are volume driven
4) Your first target should always be the nearest KEY support or resistance level, this ensures some profit is locked in and this is where you take a majority of the trade off the table, then leave a small runner for your target area
5) In most cases you will get a retest of the neckline, this is usually the best entry
Chart patterns are helpful in determining the direction of the instrument and most are reliable. When markets are ranging or we are in pre-event price action, for example before FOMC or NFP, you need to remain cautious when trading patterns. During these market environments you will likely see contradicting patterns as well as patterns inside patterns so know when to trade patterns and when not to!
Hope this helps traders.
As always, trade safe.
KOG
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🟡 Disclaimer: Not financial advice. For educational purposes only.
🔴 TWITTER: twitter.com/knightsofgold2
🟢 INSTAGRAM: www.instagram.com/knights_of_gold/
🟡 Disclaimer: Not financial advice. For educational purposes only.