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Charts Patterns

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33 views33 pages

Charts Patterns

Uploaded by

suraj.iitk
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Charts Patterns

A pattern is identified by a line that connects common price points, such as closing prices or highs or lows, during a
specific period of time.

Type Of Patterns 1- Simple Triangle


2- Reversal Patterns
3- Continuation Patterns

Patterns Name

1-Simple Symmetrical triangle

Ascending Triangle

Descending Triangle
2-Reversal Head and Shoulder

Inverse head and shoulder

Double bottom

Double Top

Falling wedge

Rising wedge

Adam eve / Inverse Adam Eve

3-Continuation Patterns

bullish Pennant
Bearish Pennant

Bull Flag /Bear Flag

Symmetrical triangle
A symmetrical triangle chart pattern represents a period of consolidation before the price is forced to breakout or
breakdown. A breakdown from the lower trendline marks the start of a new bearish trend, while a breakout from the
upper trendline indicates the start of a new bullish trend.

symmetrical triangles, form in general market for this pattern we need two
diagonal Trendline uprward trendline work as resistance LH LH
downward Diagonal Trendline work as support for this pattern we test atleast
2 time Trendline 3+

Ration of Breakout Or Breakdown


50/ upside
50 downside
take trade on Breakout or breakdown and always use for pattern drawing
wick to wick or body to body or price open Close don’t mix

Example

Example Breakdown
Example of Breakout
Ascending Triangle

The ascending triangle is a bullish ‘continuation pattern form uptrend chart. To draw this pattern,
you need to place a horizontal line (the resistance line) on the resistance points and draw an
ascending line (the uptrend line HL ) along the support
points.

Ratio of Breakout or Breakdown


100
70 upside
30 downside

draw this pattern Swing To horizontal resistance


Swing low to uptrendline need two test horizontal Resistance and uptrendline as
well
Example of Ascending Triangle Chart
Descending Triangle
Descending triangle is counter for ascending triangle

A descending triangle is a bearish chart patterns connects a series of lower highs


and a second horizontal Support

Ration
100/
70 Downside breakdown
30 Breakout
Example of Chart
Head And Shoulder

The head and shoulders trading market reversal. Characterised by a large peak with
two smaller peaks either side, all three levels fall back to the same support level. The
trend is then likely to breakout in a downward head and shoulder form after a uptrend
for trend reversal

Formation of the pattern (seen at market tops)

 Left shoulder: Price rise followed by a price peak, followed by a decline.


 Head: Price rise again forming a higher peak.
 Right shoulder: A decline occurs once again, followed by a rise to form the
right peak which is lower than the head.

Tip-: Formations are rarely perfect


Example of chart
Inverse Head Shoulder

inverse head and shoulders,is similar to Head and shoulder but Inverse head
Shoulder form after a downtrend for reversal called reversal pattern

inverted: with the head and shoulders top used to predict reversals in
downtrends. Inverse head shoulder used to predict bottom and reversal in
uptrends

Example
Example Chart

Both Example
Double bottom
A double bottom looks similar to the letter W and indicates when the price has made two
unsuccessful attempts at breaking through the support level. It is a reversal chart pattern
Chart Example of Double bottom
Double Top

Opposite to a double bottom, a double top looks much like the letter M.

 A double top is a bearish technical reversal pattern.


 It is not as easy to spot as one would think because there needs to be a confirmation with a break
below support.

A double top is an extremely bearish technical reversal pattern that forms after an asset reaches
a high price two consecutive times
Double Top chart Example
Wedge

Falling wedge/Rising wdge


 A wedge represents a tightening price movement between the support and resistance lines, this
can be either a rising wedge or a falling wedge. the wedge characterised by either two upward
trend lines or two downward trend lines.
second, a pattern of declining volume as the price progresses through the pattern; third, a
breakout from one of the trend lines

Rising wedge bearish pattern/ falling wedge bullish with declining volume when this pattern
form price go up volume goes down volume will help out for this pattern

Rising wedge


Falling wedge

Rising wedge chart example


Falling wedge Chart example
ADAM&EVE Bottom

The adam eve is combination of double bottom or top


the Adam and Eve formation is characterized by a sharp and deep first bottom on high

The adam Bottom look sharp deep (V shape large down price then spike

ADAM EVE Bottom


ADAM EVE TOP
ADAM EVE Bottom Chart example

ADAM EVE Top Chart example


Pennant
Bullish and bearish

Pennants are continuation patterns where a period of consolidation and breakout same direction for
continue the trend

Pennants are represented by two lines that meet at a set point. Uptrend line LH lower high
resistance and downtrend line HL higher low Support They are formed after strong upward or
downward moves where traders pause and the price consolidates, before the trend continues in
the same direction.
the period of consolidation should have lower volume and the breakouts should higher volume.
b
Bullish Pennant and Bearish Pennant
Chart example Bearish pennant

Bullish pennant example live RLC


RLC another example
Flag Bullish and bearish
The flag chart pattern is shaped as a sloping rectangle, where the support and resistance lines bullish
flag run in LH and LL inside channel and bearish flag run in HH HL until there is a breakout. The breakout
is usually the opposite direction of the trendlines, meaning this is a reversal pattern.

Flag patterns trend reversals or breakouts after a period of consolidation.

Bullish Flag
Flag Example Chart
Bearish Flag

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