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patterrns in technical analysis
Price patterns are often found when price “takes a break,” signifying areas of consolidation that can result in a continuation or reversal of the prevailing trend. Trendlines are important in identifying these price patterns
price pattern are different from Dow Theory
Dow theory explains regarding the trend whether its positive or negative based on the market movement or demand and supply where in price patterns it not only tells us about the trend but also shows us different patterns to know where the price is trending in the near future
Double top
Double Top is the pattern in which two equivalent tops are formed with in a period of 1 month and the volume should be more in the second top. If the above conditions are satisfied then a short position can be created when price comes to a point below the bottom located between the 2 equivalent tops identified
Double bottom
The Double Bottom Reversal is a bullish reversal pattern typically found on bar charts, line charts, and candlestick charts. As its name implies, the pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in-between.
Head and shoulders
Head and shoulders (chart pattern) On the technical analysis chart, the Head and shoulders formation occurs when a market trend is in the process of reversal either from a bullish or bearish trend; a characteristic pattern takes shape and is recognized as reversal formation.
Inverted head and shoulders
An inverse head and shoulders, also called a head and shoulders bottom, is inverted with the head and shoulders top used to predict reversals in downtrends
Rounding bottum / cup pattern
A rounded bottom reversal signals the end of a downtrend and that prices are starting to rise again. The price is declining, levels off, and then ascends. When the price levels