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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