Price Patterns help us understand the characteristics of a trend. They help us in taking a profitable Entry / Exit and Stop loss points. Few examples of price patterns include Double Top, Double Bottom, Flag, Triangle etc. Dow theory is the basis for price patterns.
Allen, , Price Patterns, Double bottom, Double Top, dow theory, flag pattern, Previous High, Previous Low, price pattern, triangle pattern
Hi,
The formation of Head and Shoulder has been a continuous decrease in the volume. That means volume will be higher in the left shoulder and eventually it decreases with the formation of head and right shoulder. The main process of the head and shoulder pattern is accumulation and distribution.
The duration to form the each should be minimum 1 month.
The cup pattern forms as a result of the buying power drying out. It doesn’t necessarily mean that sellers are stepping in either, or even if they do they lack the power to change the trend. The rounded bottom really shows the buyers are in control and thus new highs should be expected. The duration for CUP Pattern is 1 – 1.5 years as possible while during the rounding bottom, the volume is expected to be low.
Thank You So much for the explanations . I appreciate.