DT, DB, H and S and Cup patterns are useful for investments, for long term trading. Flag is good sign for a greater swing in the market. Triangle is very suggestive after the break out point.

  • : 1. Double Top 2. Double Bottom 3. Head and Shoulder 4. Cup Pattern 5. Flag Pattern 6. Triangle Pattern
  • : Dow theory gives the trend, but price pattern gives the quality and characteristics of the trend.
  • : Double Top follows Dow theory but gives early signals. There must 2 equivalent tops in a month and there should be good volume at second top or when crossing the neck line
  • : Double Bottom also follows Dow theory, giving early signals. There must 2 equivalent bottoms in a month and there should be good volume at second bottom
  • : It is a price pattern where the Head is the tallest. Head and Shoulder pattern takes place when the seller sells desperately, trying to liquidate quickly. The volume should be high in left shoulder and low in right shoulder. The time gap must be 3 months.
  • : It is bullish when the Head and Shoulder price pattern is inverted. The volume to be low in the left shoulder and high in the right shoulder.
  • : Cup pattern takes place when the buyer gradually buy and accumulate stocks. The correlation of the market movement to be low. The buyer wait for his comfort price and suck stocks, so there will be low volume and a rounded cup shape will be formed. It takes a lot of time to happen. But it is reliable.
  • : Flag pattern is bullish. A flag like horizontal line can be seen after a steep increase in price. A steep pole of about 70 degrees to be seen followed by short fluctuations that shows a flag like pattern that last for 3 to 7 days and then the price further goes up. At break up point we can take long position. On the other side, if the break out of steeper pole is on the negative side, it is bearish.
  • : Entry price is when the break out happens. Exit price can be when the trend takes the reverse direction and the stop loss can be the previous lower bottom.
  • : Triangle pattern happens when there is tough fight between both buyer and seller. We need to watch out for its existence for at least 45 days. It can favour any party - buyer or seller after the break out. We should be able to identify 5 points like a wave- A, B, C, D and E where the A is the bottom, B is next top, C is the next bottom higher than A and D is the next top lower than B which tells that both buyer and seller are aggressive. The trend becomes bullish or bearish depending on who wins. The volume should be high at break out point. If the break out up happens at around 70% triangle position at a high volume, then we can take long position at that point.

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