Price Pattern is a pattern within a chart when the prices are graphed. Price pattern plays a major role in technical analysis of the stock. When data is plotted there is usually a pattern which naturally occurs and repeats over a period of time. The pattern is used to identify the continuation or reversal signal.
There are 8 types of price patterns: Double Top, Double Bottom, Head and Shoulder, Inverse Head and Shoulder, Round Top, Round Bottom, Flag and Triangle Pattern.
The following patterns determine the bullish trend:
- Double Bottom
- Inverted Head and Shoulder
- Rounded Bottom / CUP
The following patterns determine the bearish trend:
- Double Top
- Head and Shoulder
- Rounded Top
The following patterns have both the trends:
- Flag Pattern
- Triangle
The above price patterns are vital in technical analysis and the result achieved is accurate.