The 1-2-3 Reversal occurs very frequently and has a very high success ratio. This pattern occur at the end of trends and swings and they are an indication of a change in trend. They can also be found within a trading range and within other patterns as well. They take place when the directional momentum of a trend is diminishing. Price Pushes into a high or...
The head and shoulders are trend reversal patterns. They form at the end of a trend and makes a kind of triple top or bottme but only with the middle pick reaching into a higher high or a lower low and the lift and right picks being equal thus making a sort of head with 2 shoulders. After this pattern is clear you would wait until price breaks the neckline for...
Triple tops and bottoms are trend reversal patterns. They start with a trend that pushes into resistance or support and pulls back then make another attempt at the high or low but fails to break it (At this point forming a double top or bottom) Price again, for the third time pushed to the high or low and was resisted or supported forming the triple top or...
Wedges are both trend reversal and continuation patterns. One can define the different by knowing that a rising wedge in a up trend is a sign of a reversal whereas a rising wedge in a downtrend is considered as a type of retracementand you want to be looking to trade back into the direction of the trend (see attachment) This is also the same for descending...
Double tops and bottoms are trend reversal patterns they start with a trend that pushes into resistance or support then retraces After price retraces then the opposite party comes in and attempts to push price back into the direction of the overall trend but with no success in breaking the previous high or low. The double top is a bearish reversal pattern and...
The symmetrical triangle as in all triangle patterns can be used as trend reversals. It must be noted that the symmetrical triangle must form at a key level of support or resistance.This pattern forms as price pushes into support or resistance and then consolidates making lower highs and higner lows forming the symmetrical triangle, Once price breaks the...
The descending triangle as in all triangle patterns can be used as trend reversals. It must be noted that the descending triangle must form at a key level of support or resistance.This pattern forms as price pushes into support or resistance and then consolidates making lower highs and equal lows forming the descending triangle, Once price breaks the pattern...
The ascending triangle as in all triangle patterns can be used as trend reversals. It must be noted that the ascending triangle must form at a key level of support or resistance, I like to use double tops or bottoms. This pattern forms as price pushes into support or resistance and then consolidates making equal highs and higher lows forming the ascending...
The wedge pattern is both a trend continuation and a reversal pattern, here I will only talk about trend continuation. The wedge start with an impulse move followed by consolidation and a retracement. the consolidation and retracement squeezes price together forming a wedge. In a up trend the wedge will fall calling it a falling wedge and in a down trend the...
Descending triangles are mainly considered continuation patterns but they also can be used as reversals. This pattern starts with an initial impulse move followed by a point of consolidation. As price consolidates it makes lower highs and equal lows forming the descending triangle. the momentum builds up and usually breaks out back into the direction of the...
Ascending triangles are mainly considered continuation patterns but they also can be used as reversals. This pattern starts with initial impulse move followed by a point of consolidation. As priceconsolidates it makes higher lows and the same highs until the momentum builds and breaks out back into the direction of the trend. If price does break back into the...
The rectangle pattern is a trend continuation pattern. It is formed in trending markets where there is an impulse move followed by a range of price consolidation which makes the rectangle. Once the range breaks back into the direction of the trend you would look for a 100% extention of the first inpulse move. Conventional way to trade a bullish Rectangle...
The flag is a trend continuation pattern. It starts with an impulse 1 move which represents the poll followed by a consolidation which retraces the initial move this forms the flag. after the flag has been broken in the direction of the first impulse move you would look for a second impulse move stretching the length of the first. Conventional way to trade a...