Continuation chart patterns: as the name suggests, continuation patterns signal a continuation of the prevailing trend.Examples of reversal patterns include double top and double bottoms or the head and shoulders pattern. ![]() Reversal chart patterns: as the name suggests, reversal patterns signal a shift in the trend direction.There are two main types of patterns available to price action traders: In other words, candlestick patterns are shown graphically on a price chart in a way that tells a story about who is winning the bull and bear battle.Ĭhart patterns are at the foundation of technical analysis because it allows traders to shed light on the price action quickly and from just a couple of candlesticks. Chart patterns can develop across all time frames and all asset classes. In technical analysis, chart patterns are unique price formations made of a single candlestick or multiple candlesticks and result from the price movement on a chart.
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