Price action takes its base from Dow theory, but it gives early signal. There are different types of pattern , double top , double bottom, head and shoulder , inverted head and shoulder, cup pattern, flag pattern, triangle pattern.

  • : Price pattern generally refers to the up and down movement of a security price when it is plotted over time
  • : Dow theory helps us to identify the positive or negative trend or demand and supply zone, but it lacks in identifying the characteristic of trend. Price pattern gives the characteristic of the trend, and provides us with early signal to enter or exit the market
  • : Its a bearish reversal pattern. Conditions-it forms after the asset reaches high price 2 consecutive time with moderate decline between 2 highs. Support level is the low between the 2 high . Volume should be high on the 2nd top or the support, once the support breaks it can be considered for short
  • : Its a Bullish reversal pattern. Conditions-it forms after the asset reaches low price 2 consecutive time .Resistance level is the high between the 2 low . Volume should be high on the 2nd low or the neckline, once the resistance breaks it can be considered for long
  • : It is the distribution pattern. It is bearish reversal signal. Conditions- identify shoulder, head, shoulder where head is the tallest, it should take min of 3 months, volume should be high on the left shoulder and low during right shoulder. Short position created when the neck line breaks
  • : It is the accumulation pattern. It is bullish reversal signal. Conditions- identify inverted shoulder, head, shoulder where head is the tallest downward, it should take min of 3 months, volume should be high on the left shoulder and low during right shoulder. Long position created when the neck line breaks
  • : Its an accumulation pattern .Its a bullish pattern. Conditions- cup pattern should be visible, volume is expected to be low, correlation between market to stock should be low .Long position can be created when it starts getting filled
  • : Its a bullish pattern, denotes momentum at early phase . Conditions- - pole- spot the steeper trend -rectangular shaped side ways movement(flag), generally takes 5-7 days -volume should be low during flag - positive pole flag gives positive breakout -volume is expected to increase during breakout
  • : Entry price should be the just after breakout. stop loss- in the flag last candles low Exit price - when the candle closes below the low of the previous candle
  • : Its a five wave corrective pattern, should form a triangle shaped structure. Conditions- the line connecting tops and bottoms should form a triangle. -the triangle area should be min of 45 months. -breakout can take place on any side -volume should be high on giving breakout
1 Comment
  1. Naresh 6 months ago

    Excellent work…We really appreciate your consistency

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