Below is the brief description on price patterns. It uses dow theory as base and provides early signal on the trend, information about the characteristics of trend which can be used to create long and short position. Various price pattern we discussed here are double top, double bottom, head and shoulder, inverted head and shoulder, cup pattern, flag and triangle pattern. Double top, head and shoulder, triangle can hint bearish pattern. Double top, inverted head and shoulder, cup pattern, triangle can hit us bullish pattern.

  • : Price patterns takes dow theory as base, but it provides early signal on the price movement. Double top, double bottom, head and shoulder, inverted head and shoulder, flag pattern and triangle are different price patterns used in technical analysis.
  • : Price pattern takes Dow theory(demand and supply) as base, it applies little advanced concepts. Price pattern provide early signal on the price movement, it also provides hint on quality of the trend, nature of the trend and characteristics of the trend using which we identify the expected price movement little early and act accordingly.
  • : Double top is a price pattern used to identify bearing trend. Conditions for double bottom are as follows: Two equivalent tops observed in a time frame of a month or more. Volume is more during second top. When the price falls below major support level in between the two tops, it indicates bearish trend and we can create short position.
  • : Double bottom is a price pattern used to identify bullish trend. Conditions for double bottom are as follows: Two equivalent bottoms in a month or more. Volume will be more during second bottom or when the price moves above the resistance level in between the double bottoms. When the price moves above the major resistance level in between two bottoms, it indicates bullish trend and we can create long position.
  • : Head and shoulder is again a price pattern used to identify bearish trend. Conditions to identify head and shoulder pattern is as follows: There will be left shoulder, head and right shoulder. Volume will be more during left shoulder formation and the volume will be less during the second shoulder formation. Short position can be created when the price falls below the neck. Time period to gets the pattern formed is 3 months or more
  • : Inverted head and shoulder is a price pattern used to identify bullish trend. Conditions to identify inverted head and shoulder pattern are as follows: There will be inverted left shoulder, inverted head and inverted right shoulder. Volume will be more during inverted left shoulder formation and vice versa during other shoulder formation. Long position can be created when the price move above the neck. Time period for inverted head and shoulder pattern is 3 months or more.
  • : Rounding bottom or cup pattern is indicates accumulation is happening in slower pace over a longer period of time. Volume is distributed and its difficult to see higher volumes with cup pattern. Long position can be created when the cup is getting filled.
  • : Flag is price pattern formed in shorted duration. 75-80 degree steep pole will be observed, followed to it there will be a flag (ie) price remain stagnant for 3-7 days, long position can be created if the price moves above the flag.
  • : Entry price is above major top in the flag, stop loss is below major bottom in flag and exit price is the point where the trend is broken (ie) low volume and the price tend to fall
  • : Triangle pattern is a 5 wave corrective pattern used to identify bullish or bearish trend. Mark A, B, C, D, E in the wave forming triangles, connect the all the tops together and bottoms together. If the price moves upward of the triangle and the volume is high, then form long position. Vice versa, create short position.
  • : What characteristics of trend, quality of trend price pattern indicates?
  • : Duration for cup pattern formation?
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