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Understanding Chart Patterns in Trading

Chart patterns are shapes formed by past price movements in a price chart that help traders predict future price directions. They are categorized into Continuation, Reversal, and Bilateral patterns, and include specific types such as Double/Triple Tops and Bottoms, Heads and Shoulders, and Triangles. While useful for technical analysis, chart patterns should be used cautiously and in conjunction with other indicators.

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5 views20 pages

Understanding Chart Patterns in Trading

Chart patterns are shapes formed by past price movements in a price chart that help traders predict future price directions. They are categorized into Continuation, Reversal, and Bilateral patterns, and include specific types such as Double/Triple Tops and Bottoms, Heads and Shoulders, and Triangles. While useful for technical analysis, chart patterns should be used cautiously and in conjunction with other indicators.

Uploaded by

ronin4312
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© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CHART PATTERNS

A chart pattern is a shape within a price chart, created by past price


movements, that helps traders predict future price directions, based
on how such patterns played out in the past.
A chart pattern is formed when a trend fails.
Chart patterns are an integral part of Technical Analysis and must
not be ignored.
Chart patterns fall into three main categories namely, Continuation
patterns, Reversal patterns and Bilateral chart patterns.
Chart patterns are not an ultimate indication that price will move in
the predicted direction so they must be traded carefully and in
agreement with other direction confirmations.
Some chart patterns we’ll be learning about are:
1. Double / Triple Tops and Bottoms
2. Heads and Shoulders / Inverted Heads and Shoulders
3. Symmetrical Triangles
4. Ascending and Descending Triangles
5. Rising and Falling Wedges
6. Ascending, Descending & Horizontal Channels
DOUBLE / TRIPLE / TOPS AND
BOTTOMS PATTERNS
DOUBLE / TRIPLE / TOPS AND
BOTTOMS PATTERNS
DOUBLE / TRIPLE / TOPS AND
BOTTOMS PATTERNS
DOUBLE / TRIPLE / TOPS AND
BOTTOMS PATTERNS
HEADS AND SHOULDERS PATTERN
HEADS AND SHOULDERS PATTERN
INVERTED HEADS AND SHOULDERS
PATTERN
INVERTED HEADS AND SHOULDERS
PATTERN
SYMMETRICAL TRIAGLE PATTERN
SYMMETRICAL TRIAGLE PATTERN
ASCENDING / DESCENDING TRIAGLES
PATTERNS
ASCENDING / DESCENDING TRIAGLES
PATTERNS
ASCENDING / DESCENDING TRIAGLES
PATTERNS
RISING / FALLING WEDGES PATTERNS
RISING / FALLING WEDGES PATTERNS
RISING / FALLING WEDGES PATTERNS
Ascending, descending & horizontal
CHANNEL PATTERNS
Ascending, descending & horizontal
CHANNEL PATTERNS
Ascending, descending & horizontal
CHANNEL PATTERNS

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