The sideways price action of a reversal pattern shows that when breaking out of the pattern there will be a reversal in the current trend. In this article we will be investigating the Head and Shoulders, Inverse Head and Shoulders, Double Top, Double Bottom, Triple Top, Tiple Bottom and Dimanod forex chart patterns. The Head and Shoulders The Head and Shoulders pattern is one of the most classic and reliable chart patterns. This three-peak formation is named for its similarity to a head and two shoulders. The head and shoulders pattern is mainly regarded as a reversal pattern and can be seen usually in uptrends. Eventually, the market begins to slow down and the forces of supply and demand are generally considered in balance. Inverse Head and Shoulders Inverse head and shoulders chart pattern is used in technical analysis to predict the reversal of a current downtrend. This pattern is seen as the price falls to a trough and then rises, as the price falls below the former trough and then rises again and finally as the price falls again, but not as far as the second trough. Double Top The Double Top is a bearish reversal pattern mainly found on bar charts and line charts. As the name implies the double top pattern identifies the rise of a stock, a drop, another rise to the same level as the original rise, and finally another drop. Double Bottom The Double Bottom is a bullish reversal pattern mainly found on bar charts and line charts. As its name implies, the double bottom pattern consist of two consecutive toughs that are roughly equal, with a moderate peak in-between. Triple Top The triple top pattern is used in technical analysis to pretend the reversal of a prolonged uptrend. This pattern is seen when the price of an asset creates three peaks at nearly the same price level. Triple Bottom The Triple Bottom is a bullish reversal pattern mainly found on bar charts and line charts. There are three equal lows followed by a break above resistance. As major reversal patterns, these patterns usually form over a 3 to 6 month period. Forex Diamond The diamond graphical price pattern serves for existing trend reversal confirmation in case of its occurrence on the chart. Traditionally it appears in an uptrend. The pattern is characterized by four limited trend lines representing two support lines below and two resistance levels, visually forming a figure shaped as a diamond.
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trend reversal patterns, forex chart patterns, head and shoulders chart pattern, inverse head and shoulders chart pattern, double top chart pattern,
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