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Patterntrading

📊 Chart Patterns Cheat SheetPatterns are the distinctive formations created by the movements of security prices on a chart and are the foundation of technical analysis. A pattern is identified by a line connecting common price points, such as closing prices or highs or lows, during a specific period. Technical analysts seek to identify patterns to anticipate the future direction of a security’s price. These patterns can be as simple as trendlines and as complex as double head-and-shoulders formations. 🔹 Reversal patterns are those chart formations that signal that the ongoing trend is about to change course. If a reversal chart pattern forms during an uptrend, it hints that the trend will reverse and that the price will head down soon. Conversely, if a reversal chart pattern is seen during a downtrend, it suggests that the price will move up later on. 🔹 Continuation chart patterns are those chart formations that signal that the ongoing trend will resume. Usually, these are also known as consolidation patterns because they show how buyers or sellers take a quick break before moving further in the same direction as the prior trend. Trends don’t usually move in a straight line higher or lower. They pause and move sideways, “correct” lower or higher, and then regain momentum to continue the overall trend. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
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by QuantVue
7
QQQ Cup & Handle Set-UpQQQ looks bullish, classic C&H on micro time frame - Volume matches pattern 4:1 Profit potential. TQQQ for 3xLeverage= 18%-20% possible profit / 4-5% possible losses ***Be Careful -Negative CPI data on Thursday will cancel any bullish moves - lots of volatility & market manipulation to finish this week Everyone is so Bearish right now.. this is the contrarian move... watch out for the composite man or woman Proper entry: wait for break above resistance with large buying volume - *set your stop losses
NASDAQ:QQQLong
by Black_Sheep1
7
🔠 The ABCD PatternThe ABCD is a basic harmonic pattern. All other patterns derive from it. The pattern consists of 3 price swings. The lines AB and CD are called “legs”, while the line BC is referred to as a correction or a retracement. AB and CD tend to have approximately the same size. A bullish ABCD pattern follows a downtrend and means that a reversal to the upside is likely. A bearish ABCD pattern is formed after an uptrend and signals a potential bearish reversal at a certain level. The rules for trading bullish and bearish ABCD patterns are the same, you will just need to take into account the direction of the pattern you trade and the movement of the market it predicts. 🔷Classic ABCD The point C should be at 61.8%-78.6% of AB. The point D, in its turn, should be at the 127.2%-161.8% Fibonacci expansion of BC. Notice that a 61.8% retracement at the point C tends to result in the 161.8% projection of BC, while a 78.6% retracement at the C point will lead to the 127% projection. 🔷AB = CD Here CD has exactly the same length as AB. In addition, it takes the market the equal time to travel from A to B as from C to D. As a Result, AB and CD have the same angle. This type of ABCD pattern is seen quite often and is popular among traders. 🔷ABCD Extension ABCD extension refers to when CD is the 127.2%-161.8% extension of AB. CD can be even 2 times (or more) bigger than AB. There actually are some signs that can hint that CD will be much longer than AB. They are a gap after point C or big candlesticks near point C. 📊Trading with ABCD pattern The key thing you should remember is that you can enter the trade only after the price reached the point D. Study the chart looking at the price’s highs and lows. It may be helpful to use ZigZag indicator (Insert – Indicators – Custom – ZigZag) that marks the chart’s swings. Watch the price as it forms AB and BC. In a bullish ABCD, C must be lower than A and should be the intermediate high after the low at B. Point D must be a new low below B. When the market arrives at a point, where D may be situated, don’t rush into a trade. Use some techniques to make sure that the price reversed up (or down if it’s a bearish ABCD). The best scenario is a reversal candlestick pattern. A buy order may be set at or above the high of the candle at point D. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
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by QuantVue
2
BTCUSDT is testing the KEY level!Bitcoin hit 20k as I told you in my previous analysis after a clear breakout and retest of Ascending channel. Now the price is testing the key level, where this dump began, and where the market printed the previous HL on the daily timeframe. On the Daily we can spot a clear W pattern, usually, the market wants to retest its neckline. In that case, the neckline is on 0.618 Fibonacci level on the daily timeframe, About the 4h timeframe, we can see a false breakout above the local HH and on the 4h supply. What's next? If the price is going to lose the 4h support on 20k and retest it as new resistance, we could see a retracement until the 0.618 Fibonacci level. Otherwise, If the market is going to close with a volume above 21600, we could see a new bullish scenario. Bank Holiday in the USA (Martin Luther King Jr. Day)
by InkyGrip
6
📉📈 ZigZag IndicatorZigZag's primary goal is to focus on significant swings and trends by removing insignificant and misleading price changes. ZigZag connects the price's highest and lowest points using straight lines while ignoring minor swings. ZigZag just aims to make sense of the market's previous movements; it makes no attempt to predict the price of an item. It is only based on hindsight and is not predictive in any way. It is based on the past prices of securities and cannot forecast the next swing highs and swing lows. 🟢Advantages It eliminates market noise and displays the most significant price fluctuations. It operates in several timeframes. When utilized in cooperation with other technical indicators, it gives positive results. 🔴Disadvantages It will mark the latest high or low of the price with a time lag. The last stretch of the indicator (the one that involves the current price) may be redrawn. Not predictive in any way, has to be used in combination of other strategies to be effective. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow
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by QuantVue
❌ False Breakout PatternsA breakout that failed to proceed past a level, leading to a "false" breakout of that level, is referred to as a "false breakout." One of the most essential price action trading patterns to learn is the false double bottom and double top patterns, as a false-break is frequently a very strong indicator that price may be changing direction or that a trend may soon resume. False breakouts occur in all market scenarios, including trending, consolidating, and counter-trending. Trading Tips To Respect: ✅False breakouts can happen in markets that are trending, range-bound, or going against the trend. Watch for them in all market conditions since they frequently provide insightful hints about the direction the market will take. ✅Trading against a trend can be challenging, but one of the "best" approaches is to watch for a clear false breakout signal from a significant support or resistance level, as in the last example above. ✅False breakouts provide us with a "window" into the "fight" between expert and amateur traders, allowing us to engage in trading alongside them. Trading will appear to you in a different light if you can learn to recognize and trade false breakout patterns. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
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by QuantVue
2
💎 Diamond Chart PatternAll financial markets, including the stock market, forex market, cryptocurrency market, and futures markets, feature diamond reversal patterns. Compared to many other traditional chart designs, the diamond pattern is less frequent. However, it's critical that you understand and recognize the pattern since, when it happens, it can present a great trading opportunity. In general, a diamond top pattern that follows a rise in market prices offers a greater likelihood of a trade than a diamond bottom pattern that follows a decrease in market prices. 🟢 Bullish Scenario: After a decline, a bullish diamond pattern known as a diamond bottom appears. Typically, a diamond bottom is formed by a significant price decline followed by a consolidation phase that creates up and down swing points. The appearance in this situation will resemble an upside-down head and shoulders design. The structure's peaks and troughs will be connected in the same manner. 🔴 Bearish Scenario: The diamond top typically occurs at the peak of significant uptrends. It efficiently and accurately predicts imminent shortfalls and retracements. By focusing on a head-and-shoulders structure and adding trendlines to the highs and lows, a diamond top can be found. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
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by QuantVue
EUR/USD in a lovely rangeThe algorithm has found an interesting pattern in EUR/USD. Red in chart After the break of the previous channel the price has corrected a 61,8%, the fibo level but this is also the previous zone of supports and resistances. If that's not enough, it's also the last level with accumulated volume, if we move to 1,08 the volume disappears which would be the perfect storm for a rally until the zone of 1,12 where we should expect offer again. Green in chart To see the rally to 1,12, a fast break of 1,08 must occur. So having enyrty postitions over 1,08 could be an interesting strategy with a good risk reward ratio. Blue in chart The model predicted this area as a key level to stop rallying due to multiple reasons: 1. Prior supports and resistances. 2. High volume accumulation, meaning that offer is probably waiting here. 3. 61,8% fibo level. 4. High band of the new uptrend channel. After this lateral market started dec 15, the break could firstly occur in the downside, breaking the support of 1,06. If this occurs a small double top pattern would be confirmed and we should see the price to 1,04 soon. This level would be key to see if we are still in a lateral correction of this uptrend.
by TopChartPatterns
Double bottom in Credit AgricoleThe algorithm shows an opportunity to buy credit agricole if the double bottom pattern breaks. The double bottom pattern is a bullish reversal pattern that appears on a chart as two distinct bottoms at roughly the same price level, separated by a peak in between. The pattern is formed when the price of an asset falls to a support level, bounces back up, falls back down to the same support level, and then bounces back up again. This pattern is considered bullish because it suggests that the asset's price may be about to start rising again after a period of decline. One way to trade the double bottom pattern is to wait for the price to break above the peak that separates the two bottoms. This is known as the "breakout." Once the price breaks above the peak, it is a signal to buy the asset. Some traders may also set a stop-loss order below the second bottom, to limit their potential losses in case the price does not continue to rise. So, a possibility is to wait the break of 10,2 level and look to sell in the next area where volume increase and we also find supports & resistances (11,50€). A break of the small black line could also be a great point to buy, but it's not a confirmation of the larger double bottom pattern.
EURONEXT:ACALong
by TopChartPatterns
📊 Understanding the Cup and Handle PatternA cup and handle is a technical analysis pattern that appears on a chart as a U-shaped pattern, followed by a small downward drift, resembling a handle. It is important to note that like all technical analysis patterns, the cup and handle pattern is not a guarantee of future price movements and should be used in conjunction with other analysis techniques. 📈Cup and Handle It is considered a bullish pattern and is often used by traders to indicate the potential for an upcoming price increase. The pattern is formed when the price of a security falls, reaches a bottom, and then rises back up to near its previous high before falling again. The downward drift that follows is the handle. The pattern is considered complete when the price breaks through the resistance level (the top of the cup) and continues to rise. Technical traders using this indicator should place a stop buy order slightly above the upper trendline of the handle part of the pattern. 📉Inverted Cup and Handle After the cup forms and the beginning of a noticeable handle takes shape, begin to monitor trading volume closely. One way to think of the inverted handle is a follow-up to an inverted cup. The inverted handle retraces the initial move, but not to the level of the original trend. Once you see a retracement in the form of an inverted handle of the original inverted cup pattern, setting a stop loss while selling the trend could be a potential trade idea. 👤 @algobuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
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by QuantVue
📈 4 Common Bullish Patterns🟢 RISING THREE "Rising three methods" is a bullish continuation candlestick pattern that occurs in an uptrend and whose conclusion sees a resumption of that trend. This can be contrasted with a falling three method. The first bar of the pattern is a bullish candlestick with a large real body within a well-defined uptrend. 🟢 FALLING WEDGE The falling wedge pattern occurs when the asset’s price is moving in an overall bullish trend before the price action corrects lower. Within this pull back, two converging trend lines are drawn. The consolidation part ends when the price action bursts through the upper trend line, or wedge’s resistance. 🟢 BULL PENNANT A pennant is a type of continuation pattern formed when there is a large movement in a security, known as the flagpole, followed by a consolidation period with converging trend line. Pennants, which are similar to flags in terms of structure, have converging trend lines during their consolidation period and last from one to three weeks. 🟢 ASCENDING TRIANGLE An ascending triangle is a chart pattern used in technical analysis. It is created by price moves that allow for a horizontal line to be drawn along the swing highs and a rising trendline to be drawn along the swing lows. The two lines form a triangle. Traders often watch for breakouts from triangle patterns. The breakout can occur to the upside or downside 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
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by QuantVue
30
HEAD AND SHOULDERS PATTERN - TRADING GUIDE Head and Shoulders pattern This lesson will cover the following What is a “Head and Shoulders” formation? How can it be confirmed? How can it be traded? The Head and Shoulders pattern forms after an uptrend, and if confirmed, marks a trend reversal. The opposite pattern, the Inverse Head and Shoulders, therefore forms after a downtrend and marks the end of the downward price movement. As you can guess by its name, the Head and Shoulders pattern consists of three peaks – a left shoulder, a head, and a right shoulder. The head should be the highest and the two shoulders should be at least relatively of equal height. As the price corrects from each peak, the lows retreat to form the so-called neckline, which is later used for confirming the pattern. Here is what an H&S pattern looks like. Other key elements of this pattern and its trade process are the breakouts, protective stops, profit target, and volume, which is used as an additional tool to confirm the trend reversal. So here is how you identify the Head and Shoulders pattern and how its individual components are characterized. Formation and confirmation In order to have a trend reversal pattern, you definitely need a trending market. Let's talk about the first model of H&S, the Inverse or Reversal will have the same methodology but exactly in the opposite way. While prices are trending up, our future patterns left shoulder forms as a peak, which marks the high of the current trend. For the shoulder to be formed, the price then needs to correct down, retreating to a low, which is usually above or at the trend line, thus, keeping the uptrend still in force. This low marks the first point used to determine where the neckline stands. Afterward, a new higher peak begins to form, stemming from the left shoulder low, which is our pattern head. As the market makes a higher high (the head), it then corrects back and usually, this is the point where the upward trend is penetrated, thus signaling a shift in momentum and a possible Head and Shoulders pattern. The second low that is touched after the retreat from the heads peak is the other point used to build the neckline, which is basically a line drawn through the two lows. The subsequent rebound from the second low forms the third peak – the right shoulder. It should be lower than the head and overall match the height of the left shoulder (keep in mind that exact matches rarely occur). It is also preferable that the two shoulders have required relatively the same amount of time to form as this would make the pattern stronger. In order for the Head and Shoulders pattern to be confirmed, the retreat from the third peak (the right shoulder) should penetrate the neckline and a candle should close below it. The neckline itself should be horizontal in the perfect case scenario, but that rarely happens. Instead, most often it is sloping up or down and that is of significance as well – a downward-sloping neckline is more bearish than an upward-sloping one. Volume As mentioned above, volume plays a key role as a confirmation tool and can be measured via indicators or by just analyzing its levels. Presumably, volume during the left shoulder advance should be higher than during the subsequent one, because as the head hits a higher high on the base of declining volume, this serves as an early signal for a possible reverse. This, however, does not happen every time. The next step of confirmation comes when volume increases during the decline from the head's peak and the last nail in the coffin are when volume gains further during the right shoulder's decline. Trading the pattern, stops and profit targets We said earlier that the Head and Shoulders pattern is deemed confirmed if the right shoulder's decline penetrates through the neckline and a candle closes below it. As soon as that happens and you are reassured that it is not a false breakout, you can enter into a short position. However, as you already know, no trading decisions should be made on the go, i.e. you need to have predetermined where your protective stop is going to stand and what your profit target is. Protective stop There are two common places where you can place your stop loss. The first one, which is more conservative, is right above the peak of the head, while a more standard position is right beyond the right shoulder. You can see those visualized in the following screenshot. The second option makes more sense because if the breakout through the neckline actually fails and the price rebounds back with such momentum that it rises beyond the right shoulder, then the whole pattern is flawed and you definitely do not need to wait for it to exceed the head as well. Besides, such a loose stop significantly increases the risk and reduces the risk/reward ratio, thus, reducing this pattern's trading appeal. Profit target The most common and often advised profit target is the distance (number of pips) between the head's peak and the neckline. Having estimated that distance, you then need to subtract it from the neckline, just like in the screenshot below. And how does that translate in terms of risk/reward ratio? If the breakout confirmation (the close beyond the neckline) appears very close to the neckline itself, and we enter into a short position there, we generally have a 1:1 risk-to-reward proportion, if we use a conservative protective stop. Why? Since our profit target is the distance between the heads peak and the neckline, if we decide to use the conservative option for a protective stop, then we will have the same distance as a loss limit, thus, reducing our risk-to-reward ratio to 1:1. This is why, in order to improve that ratio, most experienced traders place their protective stops more often above the right shoulders peak, given that they use the head-to-neckline profit target. However, keep in mind that this price distance should serve as a rough target, because things are usually not that straightforward and other factors such as previous support levels, crossing mid-term and long-term moving averages, etc. must be taken into consideration as well. Two ways to trade the Head and Shoulders Pattern There are generally two ways to trade this pattern, depending on how it plays out. The first one we've already mentioned. As soon as a candle closes below the neckline as a sign of confirmation, you enter into a short position with the respective profit target and protective stop described above. Now for the second way to trade the H&S formation. In this case, we have a pullback after the neckline penetration, which, once support, now acts as a resistance level. This time we need to go short once the price pulls back and tests the neckline as resistance. As soon as it rebounds from the neckline, we enter into a short position, using the same principle for placing the protective stop and aiming for the same profit as in the first scenario. Here is what this would look like.
Education
by FOREXN1
1
DGSTACC: VIX PREDICTION!!!!DESCRIPTION: The chart above is an analysis of the VIX and it current pattern formation of a SYMMETRICAL TRIANGLE FORMATION . POINTS: 1. Strong Support for VIX at 19.50 with current Demand Pocket Ceiling for FIB is at 25. 2. Move should occur by the 9th of January as price action would have to compress a lot more by then. 3. Current overall trend is a down trend that we have been seeing for VIX since early October. SCENARIO #1: If break of Symmetrical Triangle occurs towards the downside expect a bounce at 19.50 . SCENARIO #2: If break of Symmetrical Triangle occurs towards the upside expect resistance at 25 . *NOTE: NO RECESSION HAS EVER ENDED WITHOUT A VIX SPIKE TO 45 AT LEAST. TVC:VIX
TVC:VIX
by DGSTBROKERACC