• Dow Theory helps us in identifying the demand and supply, in turn the trend of the market i.e, positive or negative. It lacks in defining the characteristic behind the trend and also it delays in providing us the right signal.
Price pattern which takes the base of the Dow theory gives the characteristic behind the price movement in addition to identifying the supply and demand. It also provides us the early signal to enter the market.
In technical analysis, changes in stock prices are often signaled by price patterns. When a price pattern signals a change in trend direction, it is known as a reversal pattern; a continuation pattern occurs when the trend continues in its existing direction following a brief pause. Technical analysts have long used price patterns to examine current movements and forecast future market movements There are some important price pattern as under: 1. CUP Pattern 2.Flag Pattern 3.Triangle Pattern 4. Double or Triple Bottom and Top price pattern 5. Head and Shoulder pattern
Hi,
your answers are well framed.