Important features of different price patterns such as double top, double bottom flag, triangle, cup and head and shoulder. when to enter and exit.

  • : The Known price patterns for me is: 1) Double Top 2) Double Bottom 3) Head & Shoulder 4) Cup Pattern 5) Flag Pattern 6) Triangle pattern
  • : Price patterns follow the principle of Dow theory but gives an early Signal.
  • : The two tops should be of equivalent price. The Volume should be high in the second top or the point where it cuts the previous bottom. The duration between the two tops should be a minimum of 20 days. Short position can be considered at the point where it cuts the previous bottom
  • : There has to be two bottoms formed at equivalent price and there should be a minimum of 20 days gap between each Bottom. Volume to be high at the second bottom or the point where it crosses the previous top
  • : Head and shoulder is a distribution pattern with a minimum time of 3 months. The left shoulder should have more volume and the right shoulder should have less volume. Such a trend indicates that a strong hand in the market is trying to liquidate and short position can be considered when the price breaks the neck line
  • : Inverted head and shoulder is an accumulation pattern. with a time span of 3 months and the Long position can be considered when volume also confirms the breakout.
  • : a rounding bottom indicates the strength of consolidation and the volume should be less during the rounding bottom region. Long position can be considered
  • : Conditions for flag Pattern: Steeper pole 75 to 80 degrees rectangle price movements for 3 to 7 days and volume to confirm positive breakout
  • : Entry price to be when breakout happens after the rectangle consolidation. Stop loss upto the steeper pole probably
  • : Triangle has to have 5 Wave corrections which means both buyers and sellers are trying to close in. It might breakout either ways either bearish or bullish and it can be entered after the price breaks the 2nd wave correction mark
  • : where to fix stop loss and target for flag pattern?
1 Comment
  1. Naresh 4 months ago

    Hi,
    In response to your question

    Your Question 1:: Entry price, Exit Price and Stop loss for flag pattern
    This is an appropriate trade plan for bullish flag pattern:-
    Your entry should be just above the breakouts of the consolidation range
    Set a stop loss just below the flag formation
    Your target should be based on the height of the flag

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