Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

Learn How To Day And Swing Trade Using Stochastic, MACD, Bollinger Bands Like A Pro

Chart Patterns Theory



1/ A chart pattern is either bullish or bearish.

2/ Bullish chart patterns often emerge on or near a support level, at the end

of bearish trend or cycle and during a bullish trend.

3/ Bearish chart patterns regularly materialize on or near a resistance level, at

the end of a bullish trend or cycle and during a bearish trend.

4/ All chart patterns are distinctive, recognizable price structures.

5/ A chart pattern may develop into a fractal pattern if it duplicates itself on

various periods.

6/ Every chart pattern has its exclusive price target.

7/ A bullish chart pattern during an uptrend is frequently a bullish continuation

pattern on that time frame.


Image = "Bullish continuation flag pattern"

8/ A bearish chart pattern during a downtrend is usually a bearish continuation

pattern on that period.

9/ The start of chart a pattern formation does not always guarantee its completion.

10/ A chart pattern is not a trend except the ABCD chart pattern.

11/ A bullish chart often precedes a bullish price-action.

12/ A bearish chart pattern often precedes a bearish impulsive wave or trend.

13/ Each chart pattern has its particular components.

14/ Patterns that take long to form are normally or theoretical more reliable than

those that take lesser time.

15/ When the same pattern appears side by side in the same time frame, the first

pattern confirms the second.

16/ A bullish chart pattern can correct a bullish price-action.

17/ A bearish chart pattern can correct a bearish price-action.

18/ A pattern on a lower period can allow traders to forecast the next price move

as the same pattern is expanding on a higher time frame.

19/ A chart pattern that is in a higher time frame may duplicate itself

on various lower time frames.

20/ Most corrective or contra-trend patterns have three core components.

21/ Most cyclical patterns have two principal components or eight main sub-components.

22/ Complex patterns are combinations of two or more different patterns.

23/ For day or swing and position trading purposes, a chart pattern is primarily a trading

setup that will generate trading signals on the lower periods.

24/ A bearish chart pattern with deteriorating fundamentals (or bearish sentiment) is bearish.

On the other hand, a bullish chart pattern that is the result of robust financials is intrinsically bullish.



Cookies help our advertisers to provide, protect and improve their services.

By continuing to use our site, you agree to their cookie policy.