Chart Patterns

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Chart Patterns are patterns which occur in trading charts that help traders predict the probable direction the currency pair is likely to move. Chart patterns may form over any timeframe from a coupe of hours to even years. Japanese Candlestick patterns also provide a reliable insight as to where the immediate direction of the currency pair may head. Firstly, we will look at chart patterns then candlestick patterns. Sketches have been provided to illustrate the patterns and in a following section a number of real forex charts have been included.

Patterns can be divided into two man categories (a) Reversal Patterns where the market reverses its direction and (b) Continuation Patterns where the market continues in the same direction after a period of consolidation or retracement.

Reversal Patterns

Continuation Patterns

Head and Shoulders

Channels / Rectangles

Ascending and Descending Wedges

Hags and Pennants

123, Higher Lows, Lower Highs


Double Tops and Bottoms

1234s, Higher Lows, Lower Highs

Trendlines, Support and Ressstance Lines


Japanese Candlestick Patterns

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