Price Patterns gives the Characteristics behind Price Movements.There are Different types of patterns available.
Dow Theory, Double Top Double Bottom, Head and Shoulders, Cup pattern, Flag, Triangle patterns etc..,
Pattern play a major role in Technical Analysis.
- : Price Patterns gives the Characteristics behind Price Movements.
- : Price Patterns differs from Dow Theory by its Characteristics. DOW theory concerned about trend and know whether it is positive or negative but it doesn’t says the nature of trend. It is powerful to identify Demand and Supply.
- : Double Top is Bearish trend. Conditions : - Two Equivalent Tops. - Volume will be High at Second top(volume at point B or Point C should be High). - Duration should be 20 - 30 Days. - Short Position below Previous Low.
- : Double Bottom is Bullish trend. Conditions : - Two Equivalent Bottoms.. - Volume will be High at Second top(volume at point B or Point C should be High). - Duration should be 20 - 30 Days. - Long Position above Previous High.
- : Head and shoulder is Distributing Patterns. - Identify by Shoulder-Head-Shoulder. Conditions : - Head is Tallest. - Duration is 3 months. - High Volume at Left Shoulder. - Low Voltage at Right Shoulder. - Short Position Below Neckline. - Bearish Trend.
- : It is opposite of Head and Shoulder. Inverted Head and shoulder is Accumulation Patterns. Conditions : - Identify by Shoulder-Head-Shoulder. - Head is Lowest. - Duration is 3 months. - High Volume at Left Shoulder. - Low Voltage at Right Shoulder. - Long Position Above Neckline. - Bullish Trend.
- : - Cup pattern is Gradually Accumulating Pattern. - It takes longer Durations to Form. - It’s Bottom should be visible like Cup shape or Round Bottom Pattern. - Low Volume at the cup shape. - Long Position if the cup shape is getting filled.
- : Flag shows the Early stage of Trend. It powerful and it occurs frequently compared to other Patterns. - Identify it’s Steeper Pole(75 - 80 degree) - Rectangular Price Movements sideways. - Duration will less time(4-7 days). - Volume should be Low - Long Position when it breaks Positive Break Out.
- : Entry price : If it breaks the Positive Breakout point. Exit price : Ratio of Steeper pole(1:1). Stop loss: Bottom of Steeper pole.
- : Triangle Pattern is 5 waves in triangle pattern. Duration should be 1-100 days. Breakout expected around 70% zone. High Volume at the breakout point.