Introduction to Chart Patterns

Posted on 2023-04-17

Chart patterns are graphical representations of price movements of an asset in the financial markets. These patterns are formed when the price of an asset moves in a particular way, indicating a possible future trend. Chart patterns can be used to analyze the past price movements of an asset and predict its future movements.

Chart patterns can be broadly categorized into two types: continuation patterns and reversal patterns.

Continuation patterns indicate that the current trend is likely to continue, while reversal patterns indicate that the trend is likely to reverse.

Examples of continuation patterns include:

Bullish flag pattern

Bearish flag pattern

Bullish pennant pattern

Bearish pennant pattern

Bullish wedge pattern

Bearish wedge pattern

Examples of reversal patterns include:

Head and shoulders pattern

Inverse head and shoulders pattern

Double top pattern

Double bottom pattern

Triple top pattern

Triple bottom pattern.

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