Price patterns are the patterns formed by price movements in charts. By analysing them we can predict their future movement to some extent. Double top, double bottom, head and shouders, flag etc are some of the price patterns.

  • : Price patterns are the patterns formed by price movements in charts. By analysing them we can predict their future movement to some extent. Double top, double bottom, head and shouders, flag etc are some of the price patterns.
  • : Dow theory helps us to assess if the trend is upwards or downwards, whereas price patterns help us to understand more details in the movement of stock prices
  • : If a price pattern has reached two tops each time touching the same resistance level, then it tends to become bearish . The time interval between the two tops should be 3 months at least.
  • : If a price pattern has reached two bottoms each time touching the same support level, then it tends to become bullish after that . The time interval between the two tops should be 3 months at least.
  • : Head and shoulder pattern is a higher peak surrounded by two slightly lower peaks . The duration is 3 months for the formation. Volume is higher in the left shoulder and low in the right shoulder.
  • : Inverted head and shoulder is a deeper bottom surrounded by two less deeper bottoms on boh sides. Volume should be high in left shoulder and low in the right side.
  • : Cup like formation in the chart wth low volume is the cup pattern. As it finishes sowly uptrend deveops. It takes many months to form.
  • : Flag has a steep pole of 75 – 80 degree, rectangular price movements will happen for 3-7 days. It develops into an uptrend.
  • : Entry price is at the breakout stage. Exit price at the point where the top reverses. Stop loss is the point where breakout gap is filled.
  • : Triangles are formed by converging trend lines because the price trend moves sidewards.
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