Sat, 14 Oct 2006 15:05:41 MDT
|
Written by Tom Smith
The Head and Shoulders Bottom marks a "reversal" pattern in a downtrend market and is popular among currency traders. The pattern contains 2 Shoulders, 1 Head and the Neckline (resistance).
The first point - the left shoulder - occurs as the price of the currency pair in a falling market hits a low and then rise back to the neckline.
The second point - the head - happens when prices fall to an even lower low and then rise back again to the neckline. The third point - the right shoulder - occurs when prices fall again but don't hit the low of the head. A key element of the pattern is the neckline. The neckline can be horizontal, slope up or slope down and is formed by drawing a line connecting two high price points of the formation.
Sat, 14 Oct 2006 08:36:58 MDT
|
Written by Tom Smith
The head and shoulders top marks a "reversal" pattern in an uptrend market and is extremely popular among currency traders. The pattern contains 2 Shoulders, 1 Head and the Neckline (support).
The first point - the left shoulder - occurs as the price of the currency pair in a rising market hits a high and then falls back to the neckline.
The second point - the head - happens when prices rise to an even higher high and then fall back again to the neckline again. The third point - the right shoulder - occurs when prices rise again but don't hit the high of the head.
Fri, 13 Oct 2006 17:47:07 MDT
|
Written by Tom Smith
A Rectangle or Box is a continuation pattern and describes a price pattern where supply and demand seems evenly balanced for an extended period of time. The currency pair moves in a tight range, finding support at the rectangle's bottom and hitting resistance at the rectangle's top.
Finally, price will break out the rectangle's range, either by moving through support or resistance. If the prior trend was an uptrend, the most likely direction will be UP, if the prior trend was a downtrend, the most likely direction will be DOWN.
Thu, 12 Oct 2006 08:47:12 MDT
|
Written by Tom Smith
Pennants and Flags are short-term continuation patterns and are among the most reliable of all continuation patterns, they are formed when there is a sharp price movement followed by a consolidation phase (sideways action), thereafter the previous up or down trend is expected to resume.
Wed, 11 Oct 2006 12:56:43 MDT
|
Written by Tom Smith
At it's most basic level, Rising Wedge formations are bearish continuation patterns and look similar to triangle patterns (ascending triangle, descending triangle, and symmetrical) because of the converging trendlines( support and resistance) and narrowing price ranges(forms a cone).
Rising wedges slope up and have a bearish bias, they are usually found in down-trending markets. However, they can become a reversal pattern if the currency pair price move above the upper (resistance) trendline.
Wed, 11 Oct 2006 06:58:25 MDT
|
Written by Tom Smith
At it's most basic level, Falling Wedge formations are bullish continuation patterns and look similar to triangle patterns (ascending triangle, descending triangle, and symmetrical) because of the converging trendlines( support and resistance) and narrowing price ranges(forms a cone). Falling wedges slope down and have a bullish bias, they are usually found in up-trending markets. However, they can become a reversal pattern if the currency pair price move below the lower (support) trendline.
Tue, 10 Oct 2006 14:20:22 MDT
|
Written by Tom Smith
Double Top formations are reversal patterns and often seen to be among the most common (together with double bottom formations) patterns for currency trading. Double Tops are identified by two consecutive peaks of similar (or almost) height with a moderate pull back in between (neckline).
The double top can be a major reversal pattern (if found on a daily chart or bigger timeframe) that can be formed after an extended uptrend. This pattern is confirmed when the currency pair price breaks from (it's second peak) above through the neckline, the most likely price direction is now DOWN.
Mon, 09 Oct 2006 15:16:29 MDT
|
Written by Tom Smith
Double Bottom formations are reversal patterns and often seen to be among the most common (together with double top formations) patterns for currency trading.
Double Bottoms are identified by two consecutive lows of similar (or almost) height with a moderate pull back in between (neckline peak).
The double bottom can be a major reversal pattern (if found on a daily chart or bigger timeframe) that can be formed after an extended downtrend. This pattern is confirmed when the currency pair price breaks from (it's second bottom) below through the neckline, the most likely price direction is now UP.
Mon, 09 Oct 2006 13:52:13 MDT
|
Written by Tom Smith
This pattern shows two converging trendlines (support levels & resistance levels) and is (1) a bearisch formation that usually forms during a currency pair downtrend as a continuation pattern (downtrend will continue) or (2) a bullish formation that usually forms during a currency pair uptrend as a continuation pattern. (uptrend will continue)
This pattern is confirmed when the currency pair price breaks out of the symmetrical triangle formation (1) to the downside and closes below the lower support trendline in order to continue the downtrend or (2) to the upside and closes above the upper resistance trendline in order to continue the uptrend.
Mon, 09 Oct 2006 13:00:08 MDT
|
Written by Tom Smith
This pattern is similar to the ascending triangle chart pattern but reverse, it shows two converging trendlines (support levels & resistance levels) and is a bearisch formation that usually forms during a currency pair downtrend as a continuation pattern (downtrend will continue.
This pattern is confirmed when the currency pair price breaks out of the descending triangle formation to the downside and closes below the lower support trendline. However, when the currency pair price breaks out to the upside, the descending triangle now is a reversal pattern.
Courses & Tutorials. More to come..stay tuned and visit often!
