Get to know chart patterns in forex trading that are widely found - Trading forex trading using the right method will make good results. There are many methods and ways traders use in making the decision to enter the forex market, each trader has a different method to generate maximum profit. Learning many method techniques is good, if you already know the many methods of trader's work it will be easier to adjust to the trader's comfort. The more you learn about forex trading the better, one that many traders learn is chart patterns.
What is chart patterns ? Chart Pattern is a price chart pattern that occurs repeatedly, so the pattern can be used to predict where the price will move. Chart Patterns are very important in technical analysis, because in addition to being able to detect price direction, this pattern will always repeat itself if we observe it properly, besides that this pattern can also be observed on all timeframes, from minutes to months.
In general, chart patterns are divided into 3 main categories:
- Reversal Pattern
- Continuation Pattern
- Bilateral Pattern (trend reversal or continuation pattern)
The following is chart patterns in forex trading that are widely found, let's discuss it in more detail.
#Double Top and Double Bottom
The double top is a reversal signal formation that is formed after the formation of a strong uptrend pattern
The double bottom is a reversal signal formation that is formed after the formation of a strong downtrend pattern.
#Cup and Handle Pattern
It is called the Cup And Handle Pattern because it resembles a cup and handle. This pattern is included in the category of continuous uptrend patterns.
#Bullish dan Bearish Pennant
After a movement that tends to go up (uptrend) or down (downtrend), seller and buyer traders start getting tired and resting for some time (consolidating) by forming a pattern like a sideways triangle before finally continuing the previous movement.
#Head and Shoulder dan Inverted Head and Shoulders
The Head and Shoulders Pattern is a pattern that seems to form the head and shoulders (left and right). The head and shoulders pattern is often found during an uptrend and is an indication that after this pattern is formed there is a possibility that the price will turn into a downtrend.
The inverted head and shoulders pattern is the opposite of the head and shoulders. And usually you will encounter this pattern during a downtrend.
#Bullish dan Bearish Flag Pattern
The Flag pattern includes a continuous pattern. Price movements occur in a narrow range, indicating a consolidation pattern before the previous trend continues.
The interesting thing about chart pattern analysis is the appearance of chart patterns that often repeat themselves from certain price formations. But it should also be noted that the same chart pattern sometimes gets different market reactions, and not a few that appear to have the same pattern as the previous history. By knowing the chart patterns that are often found in forex trading, we as traders can predict where prices will continue and the market trend. I hope this article is useful for you 🙂