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Most patterns have measuring techniques which great objectives for the next move.
Reversal Patterns
Common to all reversal patterns
There must be an identifiable trend. Bottoms often have gradual basing and move with increased volume Topping patterns are much more volatile than bottoms. The longer the trend is in place the more substantial the reversal move. First signal of a reversal is the violation of a trendline.
Source: chartpatterns.com
Continuation Patterns
Triangles
Symmetrical Ascending Descending
Symmetrical Triangle
Forms two trendlines the descending line has lower highs and the ascending line has higher lows. Usually breaks out of the triangle in the same direction it entered the triangle. Continuation. There are normally three waves within the triangle. The closer the price gets to the apex of the triangle the higher the probability of a false breakout. Volatility get lower as the trading ranges get smaller. Volume also recedes, The distance from the beginning of the trend to the entry into the triangle creates a profit objective upon exit from the triangle.
Source: chartpatterns.com
Source: chartpatterns.com
Ascending Triangle
The triangle is create by horizontal top and an ascending upward trendline. Breakout is upward through the horizontal line. Also has a three wave count within the triangle. Breakout should be accompanied by high volume. Often the breakout point will be tested on a retracement and holds.
Source: chartpatterns.com
Source: chartpatterns.com
Descending Triangle
Descending triangle is created by a horizontal trendline along the bottoms and a down sloping trendline connecting highs. Market usually enters in a downward direction and exits to the down side. Continuation pattern. There is usually a three wave count within the triangle formation. Breakout is normally accompanied by high volume.
Source: chartpatterns.com
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