Market Trends
1) Uptrend Chart
2) Downtrend Chart
3) Sideways Chart
Charting Patterns
Charting Patterns are the combination of multiple types of
candles, It helps a Trader to figure out entry and exit
point in stock.
It also helps to suggest what prices might be next, based
on what they had done in the past.
According to market trend there is two types of
charting patterns,
1) Bullish charting patterns
2) Bearish charting patterns
Bullish patterns are either reversal or continuation patterns,
with the help of trend we can trade all patterns.
Bullish Charting
Patterns
DOUBLE BOTTOM PATTERN
Minimum Target should be the
target of AB A'
A B' Buy Conservative
C
B
Length of AB Buy Aggressive
Double bottom is Bullish reversal charting pattern, When
price touches two times to the support and it sometimes
looks like W.
Double bottom formed at the end of major downtrend and
indicate potential upward move in stocks.
Double bottom pattern occurs at any time frames.
When double bottom forms aggressive traders can enter at C
point also on reversal and target is length of AB.
Conservative buyers can enter only after neckline breakout.
stoploss for double bottom reversal is support of reversal
candle or its low, and neckline breakout stoploss will be
nearest support or breakout level.
TRIPLE BOTTOM PATTERN
Min Target Height
of DE
B D F Buy Conservative
E'
Height of DE
A C E Buy Aggressive
Triple Bottom Pattern
Reversal pattern with 3 bottom near same levels, looks like
sideway channel.
First bottom in this formed when price of stock declines and
bounce back from specific support levels and sellers are also
active at resistance.
Triple bottom is reliable pattern where buyers can enter on every
reversal from support and sellers can sell at resistance
Also buyers can enter after the neckline breakout in securities.
Stoploss for both reversal and neckline breakout trading should
be nearest support of stock.
INVERSE HEAD AND
SHOULDER
Minimum Target =
Height of Head
Buy after the upward breakout
with high Vol.
Return
Move
Left Right
shoulder shoulder
Head Height
of the head
Inverse Head and Shoulder Pattern
Inverse head and shoulder appear in downtrend stock and
indicates reversal from bearish to bullish trend reversal and it
appears in all time frames.
Inverse head and shoulder have two shoulder, left and right, both
are about same height and head has more height than shoulder.
Entry in this pattern is after neckline breakout and target is height of
head and stoploss for this pattern is height of right shoulder.
Many times, inverse head and shoulder shows false breakout or
retest from support, so traders' entry on neckline breakout above 1%
of neckline considered as safe.
ASCENDING
TRAINGLE
Ascending Triangle Pattern
Ascending triangle is continuation pattern occurs
in uptrend and downtrend also.
Ascending triangle has same resistance but support in the
stock will go up on every reversal.
In ascending triangle minimum two Higher high and two
Higer low are necessary but when it forms with many
swing lows and highs with price move in same triangle led
to stronger breakout.
conservative traders can enter on neckline breakout 1% above
resistance and stoploss is below last triangle support (low).
Aggressive buyers can enter on every reversal of ascending
triangle with swing low stoploss.
In ascending triangle neckline breakout do pyramiding on
closing basis and target is height of target.
RECTANGLE
PATTERN
Bullish rectangle mostly forms during uptrend and in
accumulation phase which is continuation pattern where
price pauses and make a channel.
Bullish rectangle offers a buying opportunity.
Bearish rectangle mostly forms during downtrend and in
distribution phase where price pauses and make a channel.
Bearish rectangle offers a selling opportunity.
Minimum target for bullish rectangle is range between support
and resistance after neckline breakout and stoploss and
target ratio is 1:1 (Risk to Reward).
BULLISH FLAG
Bullish flag is continuation pattern found during strong
uptrend and reassembles like flag on a pole.
In this flag is formed within two parallel line and shows
strong upside momentum after neckline breakout of flag
(Consolidation phase).
Stoploss should below bottom of Consolidation pattern.
Traders can enter in this after only neckline breakout in flag
for minimum target height of pole.
Always manage Risk to Reward Ratio 1:2 or 1:3 for
Bullish flag.
ROUNDING
BOTTOM
A Rounding bottom is a bullish trend reversal pattern that
occurs at the end of end of downtrend.
Rounding bottom pattern requires more time for formation and
traders can enter after neckline breakout.
Rounding bottom target is distance between lowest point of
rounding bottom and neckline of rounding bottom.
Always keep stoploss to the nearest support (low) of
Rounding bottom or previous swing low.
CUP AND HANDLE
Cup And Handle Pattern
When Rounding bottom pattern fails at resistance it has
possibility to form cup and handle pattern.
It is followed by bullish price move in upward direction and found
in all time frames.
The target for cup and handle pattern after breakout, first it will go
up to height of handle and secondly it will go up to height of cup.
Stoploss for cup and handle pattern is nearest swing low (support).
Cup and handle pattern is one of the most important pattern to
identify multibagger stock.
BULLISH PENNATE
Symmetrical triangle is continuation pattern of upward trend.
It occurs at different time frame.
Traders can buy securities after neckline breakout in
the Symmetrical triangle.
Target for Symmetrical triangle pattern is height of
Triangle and stoploss is previous support for triangle.
FALLING WAGE
Falling wage is Bullish reversal pattern appears when prices in the
swing low of a downtrend comes down in a parallel channel which
further.
The falling wage pattern is tradable once the price breaks
resistance with strong Bullish candle and good volume.
stoploss for falling wage pattern is previous support.
and mostly trailing stoploss used for trading falling wage pattern
THANK YOU..
