Posts tagged: distribution

Chart Patterns: Double-Top

Introduction: 

The principles discussed in last month’s articles on chart patterns, the overview and the head and shoulders, underlie reversal chart patterns in general. They apply to this article’s topic as well: the double-top reversal pattern

Perhaps the most common mistake when identifying patterns is neglecting to consider the preceding trend. This is akin to neglecting the context. To emphasize an important point made in the overview article: 

“Chart patterns are divided into two main groups: reversal patterns which occur at the end of a trend, or continuation patterns which reside within the trend. It logically follows then that a prerequisite to any chart pattern is the existence of a prior trend.” 

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Chart Patterns: Head and Shoulders

Introduction:    

We discussed important concepts common to chart patterns in a previous article. Having laid the foundation, we now focus on a very popular reversal pattern called the “Head and Shoulders”. Remember that reversal patterns are found at the end of a major trend, while continuation patterns form within a trend. Read more »

Chart Patterns: An Overview

Picture of nested Russian dollsIntroduction:

Consider any field of study, and it soon becomes apparent that topics can be categorized in a nested fashion, much like a set of wooden Russian dolls. In the field of technical analysis, chart patterns are one of the bigger dolls inside of the big doll.

Having a detailed understanding of chart patterns will dramatically improve your technical analysis skill regardless of your trading time frame. The interpretation of shorter term price movement will become clearer when taken in light of the larger chart pattern.

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