Forex - Forex Trading - Currency Trading

Chart Reversal Patterns

Written by Tom Hanok

Reversal patterns are chart patterns which reverse the trend of a currency pair once the pattern is confirmed.

Reversal chart patterns include all of the patterns listed below:

1) Top & Bottom Patterns

Double Top

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).

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Double Bottom

Double Bottom chart 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 up in between (neckline peak).

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Triple Top

Triple Top formations are reversal patterns with bearisch bias, this pattern is not often seen in the forex market. Triple Tops are identified by three consecutive highs of similar (or almost) height with 2 moderate pull backs in between (neckline).

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Triple Bottom

Triple Bottom formations are reversal patterns with bullish bias, this pattern is not often seen in the forex market. Triple Bottoms are identified by three consecutive lows of similar (or almost) height with two moderate pull backs up in between (neckline peaks).

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2) Head & Shoulders Patterns

Head & Shoulders Top

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, one Head and the Neckline (support).

Head & Shoulders Bottom

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).

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