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Trading Patterns Cheat Sheet PDF

1. Trading patterns emerge from the buying and selling behavior of traders over different time frames, creating support and resistance levels, trends, and ranges in price movement. 2. Common patterns include trend lines, key support and resistance levels in ranges, swings in price as buyers and sellers enter and exit, and accumulation and distribution phases of stocks. 3. Breakouts of trend lines or trading ranges can signal the continuation or reversal of a trend. Charts visually represent the accumulated trading patterns of all market participants over time.

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727 views7 pages

Trading Patterns Cheat Sheet PDF

1. Trading patterns emerge from the buying and selling behavior of traders over different time frames, creating support and resistance levels, trends, and ranges in price movement. 2. Common patterns include trend lines, key support and resistance levels in ranges, swings in price as buyers and sellers enter and exit, and accumulation and distribution phases of stocks. 3. Breakouts of trend lines or trading ranges can signal the continuation or reversal of a trend. Charts visually represent the accumulated trading patterns of all market participants over time.

Uploaded by

Ravi roy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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  • Trading Patterns Overview
  • Pattern Examples
  • Resources and References

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Trading Patterns Cheat Sheet

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Trading Patterns Cheat Sheet
Trading patterns in the financial markets are created by the action of traders and investors
buying and selling positions in different time frames.

Here are the different types of patterns that emerge through buyers and sellers behavior.

1. Buyers and sellers are always equal with every trade it is the price levels that they meet
at that changes.
2. Trend lines are vertical or horizontal resistance or support levels created by buyers and
sellers inside a trend to create lower lows, higher highs, or price ranges.
3. When buyers keep coming in at a price level you will see a key support level in a range.
4. When sellers continually exit at a price level you will see a key resistance level in a
range.
5. Swings in price happen as sellers diminish at higher price levels and buyers come back
in at lower price levels.
6. Stocks have patterns of accumulation into weakness during uptrends.
7. Stocks have patterns of distribution into strength during downtrends.
8. Most trends in price are interrupted by trading ranges before the trend continues.
9. A breakout of a long term trend trading range or trend line can signal the continuation or
reversal of a trend.
10. Charts are the visual creation of all traders and investors accumulated past actions of
trading patterns.

Here are some common trading patterns in stocks.

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Here is a historical pattern for a growth stock under long term accumulation until it ends and
begins to go under a distribution stage.

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Chart courtesy of ChartPattern.com

Here is a chart of common bullish, bearish, and reversal trading patterns that play out in
markets. The trend line break is their signal. Of course a trader must manage a trade taken with
one of these breakouts using the right position sizing, stop loss, trailing stop, and profit target to
be profitable.

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A chart pattern is not a trading system just like a map is not a journey. It is the management of
your trip that determines whether it will be good or bad.

We wish you much success!


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Steve & Holly Burns

New Trader U

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