Chart patterns play a critical role in usefulness technical analysis. Chart patterns are a result of human nature and trading psychology. If you can learn to recognize patterns early you can also learn to profit from breakouts and reversals.
As you all know I’m a big fan of technical analysis and chart patterns are very powerful for any trader.
Why Are They So Important?
Simply put, chart patterns are just a series of price action that occurs in a stocks trading. These can happen on any time frame really; monthly, weekly, daily and intra-day. The great thing about chart patterns is that they repeat themselves over and over again. Human psychology and investor emotional cycles never fade. The markets change but human emotion does not!
So if you can learn to recognize these patterns early, you will gain a real competitive advantage in the markets. Just as volume, support and resistance levels, RSI, and Fibonacci Retracements can help your technical analysis trading, chart patterns can help identify trend reversals and continuations.
Print This Out So You Won’t Forget!
Click the print button right now and keep this article by your desk. I promise it will be a huge help in the coming weeks and months. Just having them in your face each and every day will subconsciously help you learn to recognize them in live trading.
2. Cup And Handle
6. Inverse Head And Shoulders
7. Bullish Symmetric Triangle
10. Double Top
13. Head And Shoulders Top
Add your comments below and let me know what patterns you like to trade besides the 13 above. There are many more stock chart patterns out there, but these will just get you started.
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