Posts Tagged ‘pattern’

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Triangle Pattern — Forex Trading — Chart Pattern

In this video, we will look at the triangle pattern. It is a very powerful, yet extremely simple formation in the forex market. So, we have here a hypothetical chart, that is kind of moving sideways. If we draw a line above and below, we will see right away that the price is in a triangle. The price can continue going in the triangle and more often than not, that is exactly […]

Reading the Charts — Bullish Flag

This is one of those patterns that has often times an above average expectation, because it completes more times, when you identify a real bullish flag. A bullish flag is formed during a market correction in an uptrend. Retail traders will see this as a potential reversal, but it is not, we look for some specific setups that will let us know that the market is […]

How To Trade the Bull Flag — Continuation Chart Pattern

A bull flag pattern occurs in a bull market where the price moves upwards, but encounters a resistance level. Then the price corrects into the pattern until it finally breaks the resistance, and breaks out to the upside. So, how do we trade this pattern? There are some simple rules. Always trade on the breakout. Don't trade on support level. Once the price breaks the resistance level, open directional trade. Stops […]

Reading the Charts — Bearish Pennant

The bearish pennant pattern is a good pattern to look for potential continuation short. A bearish pennant is a triangular flag formation that occurs during a market correction in a downtrend. It is easy to identify because it shows lower highs and higher lows, which create two lines that points sideways. The pennant flag usually consists of 4 to 8 candles. If it goes beyond that and it continues to go […]

Bullish Candlestick Chart Pattern — Bullish Hammer

This pattern occurs at the bottom of a downtrend. This is a single candlestick pattern that has a long lower shadow with a very small body or very near the top of its daily trading range. Recognition criteria: The market is characterized by a prevailing downtrend. A small body at the upper end of the trading range is observed. The color of the body is not so important. The shadow of this candlestick is at least twice as the length of the body. […]

Trading Head-And-Shoulders Chart Pattern

Trading the head and shoulders chart pattern in the common way is to treat it as a reversal pattern and the pattern is named due to the shape of the pattern that resembles the head and shoulders of a human. There are three peaks with the middle one being the highest. The fourth feature is called the neckline. It is formed by drawing a line between the two depressions. Classical technical analysis defines an uptrend as a series of higher highs and higher lows. […]

Forex Candlestick Patterns Explained With Examples

Candlestick charting is widely used by most traders around the world due their ease of use and better representation of what is taking place in the market. Candlesticks are formed using the open, high, low, and close prices of a financial instrument for the chosen time period whether it is 30-min, 4-hour, or 1-day. Candlestick has different components. The wide section of the candlestick is referred to as the real body and it is what represents […]

Forex Inside Bar Candle Indicator

Inside bars provide a high probability setup with a good risk to reward ratio. An inside bar is completely contained within the range of the preceding bar. The inside bar has a higher low and lower high than the preceding bigger bar. The preceding bar is also known as the mother bar. The less common occurrence of multiple inside bars within the range of the same mother bar usually means the price is coiling up […]

Forex Engulfing Candle Pattern Indicator

Engulfing candles are easy to spot on a candlestick chart. They provide a good way to enter a trend or to signal a potential trend reversal. There are two types of engulfing candles, bullish engulfing and bearish engulfing. Bullish engulfing occurs when the body of the bullish candle is bigger than the preceding bearish candle. As implied by its name, the pattern suggests that the bulls have taken control of the price movement. A bearish engulfing occurs […]

Technical Analysis — Double Top

A double top is a reversal pattern and it is a visual representation of the changing of the control of trend. It is from the very first opportunity to actually see it until it actually confirms and everybody can see it. What we see in this pattern is that we had a great big bullish trending move. Next we are looking for the reversal of the trend. So, a double top is a potential reversal […]