4 Classic Bullish Patterns EVERY TRADER Must Know

In the today's post, we will discuss accurate bullish price action patterns that you can apply for trading any financial instrument.

1️⃣Bullish Flag Pattern
Such a pattern appears in a bullish trend after a completion of the bullish impulse. The flag represents a falling parallel channel. The market corrects itself within.

Bullish breakout of the resistance line of the channel is a strong bullish signal that can be applied for buying the market.
Best entries should be placed immediately after a breakout or on a retest.
Safest stop loss is below the lows of the flag.
Target - the next key resistance.


Here is the example of a bullish flag pattern that was formed on Gold on a 1H time frame. As you can see, after the breakout of the resistance of the flag, a strong bullish rally initiated.

2️⃣Ascending Triangle
Such a pattern forms in a bullish trend on the top of the bullish impulse. The market starts consolidation, respecting the same highs and setting higher lows simultaneously.

The equal highs compose a horizontal resistance that is called the neckline.
Its breakout is an important sign of strength of the buyers.

Buy the market aggressively after a violation, or set a buy limit order on a retest.
Stop loss should lie at least below the last higher low within a triangle.
Target - the next strong resistance.

Take a look at that ascending triangle formation on EURUSD.
Bullish breakout of its neckline was a perfect bullish signal.

3️⃣Falling Wedge
That formation is very similar to a bullish flag pattern.
The only difference is that the price action within the wedge is contracting so that the trend line of the wedge are getting closer to each other with time.

Your signal to buy is a bullish breakout of the resistance of the wedge.
Stop loss is strictly below its lows.
Target - the next key resistance.

GBPUSD formed a falling wedge on a 4H time frame, trading in a strong bullish trend.
You can behold how nicely the price bounced after a breakout of its upper boundary.

4️⃣Horizontal Range
Similarly to the ascending triangle, the horizontal range forms at the top of a bullish impulse in a bullish trend.
The price starts consolidation, then, setting equal highs and equal lows that compose a horizontal channel.

Breakout of the resistance of the range is a strong trend-following signal.
Buy the market aggressively after a breakout or conservatively on a retest.
Stop loss will lie below the lows of the range.
Target - the next strong resistance.

Dollar Index formed a horizontal range, trading in a strong bullish trend.
Breakout of the resistance of the range triggered a bullish rally.

The best part about these patterns is that they can be applied on any time frame. Whether you are a scalper, day trader or swing trader, you can rely on these formations and make consistent profits.