CHART PATTERN : THE BASIC KNOWLEDGE

Story by: Gita Indra
Published: May 09, 2019
Viewed 468 times

Story by: Gita Indra
Published: May 09, 2019
Viewed 468 times


CHART PATTERN : THE BASIC KNOWLEDGE

By learning to recognize patterns early on in trading, you will be able to work out how to profit from patterns. I am a believer in technical analysis and do feel that chart patterns are a very powerful tool.

The measurements of the chart pattern can be used to project the next price movement and what target to aim for. These patterns can either be traded aggressively (with less conformation) or conservatively (with more conformation) so the rules of entry and exit can vary. It's easy to calculate the reward / risk for them, which is important to know before entering a trade.





One of the three assumptions discussed earlier in this tutorial was that HISTORY REPEAT ITSELF. The theory behind chart patterns is based on this assumption – that certain patterns consistently reappear and tend to produce the same outcomes. For example, as market sentiment shifts from optimism to fear, a certain pattern might emerge before traders and investors start selling and send the stock price lower.

As the definition, Chart patterns are the foundational building blocks of technical analysis. They repeat themselves in the market time and time again and are relatively easy to spot. Chart patterns also have an established definition and criteria, but there are no patterns that tell you with 100% certainty where a security is headed. The great thing about chart patterns is that they tend to repeat themselves over and over again. This repetition helps to appeal to our human psychology and trader psychology in particular.



 

There are 2 types of patterns, depending on how price is likely to behave after completion: REVERSAL & CONTINUATION Pattern, where price is likely to continue its course and bilateral patterns, where price can go either way, depending on whether it breaks to the upside or to the downside. A reversal pattern signals that a prior trend will reverse upon completion of the pattern, while a continuation pattern signals that the trend will continue once the pattern is complete. These patterns can be found across any timeframe. 

In this section, we will review some of the more popular chart patterns.


 

Reversal Patterns

  • Double Top
  • Double Bottom
  • Head and Shoulder
  • Inverse Head and Shoulder
  • Falling Wedge
  • Rising Wedge

Continuation Patterns

  • Flag, Pennant
  • Symmetrical Triangle
  • Ascending Triangle
  • Descending Triangle
  • Retangle
  • Cup with Handle

​RECCOMENDATION FROM EXPERT:

  • So, The measurements of the chart pattern can be used to project the next price movement and what target to aim for. We are a believer in technical analysis and do feel that chart patterns are a very powerful tool.
  • Let's keep learning and studying in financial market especially technical and fundamental, FEEL FREE to acces Live Trading School MRG Premiere
  • Share this article to your collegous and get FREE CONSULTATION with me to achieve maximum PROFIT
  • CALL or Whatsapp to +62 838.96.96.96.39 and find your trading partner INDRA.
click
click

Connect With Us:

Solutions

A Member Of

INDONESIA TECHNICAL ANALYST ASSOCIATION

Awards

Pada 1 Februari 2014, Gema Merdeka Goeyardi, MM, CAT, President Director & Founder Astronacci International menerima penghargaan rekor dunia dari MURI (Museum Rekor Indonesia) atas rekor "Metode Proyeksi Keuangan Pertama Menggunakan Ilmu Astrology dan Bilangan Fibonacci" di Jakarta. [ read more ]

Awards

Pada 1 Februari 2014, Gema Merdeka Goeyardi, MM, CAT, President Director & Founder Astronacci International menerima penghargaan rekor dunia dari MURI (Museum Rekor Indonesia) atas rekor "Metode Proyeksi Keuangan Pertama Menggunakan Ilmu Astrology dan Bilangan Fibonacci" di Jakarta. [ read more ]