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How to Trade Triangle Chart Patterns

A triangle chart pattern involves price moving into a tighter and tighter range as time goes by and provides a visual display of a battle between bulls and bears. The triangle pattern is generally categorized as a “continuation pattern”, meaning that after the pattern completes,  it’s assumed that the price will continue in the trend direction it was moving…

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How to Trade Bearish and Bullish Pennants

Similar to rectangles, pennants are continuation chart patterns formed after strong moves. After a big upward or downward move, buyers or sellers usually pause to catch their breath before taking the pair further in the same direction.   Because of this, the price usually consolidates and forms a tiny symmetrical triangle, which is called a pennant….

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How to Use Rectangle Chart Patterns to Trade Breakouts

A rectangle is a chart pattern formed when the price is bounded by parallel support and resistance levels. A rectangle exhibits a period of consolidation or indecision between buyers and sellers as they take turns throwing punches but neither has dominated.   The price will “test” the support and resistance levels several times before eventually breaking out.   From there, the price could…

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How to Trade Wedge Chart Patterns

In a Wedge chart pattern, two trend lines converge. It means that the magnitude of price movement within the Wedge pattern is decreasing. Wedges signal a pause in the current trend. When you encounter this formation, it signals that forex traders are still deciding where to take the pair next. A Falling Wedge is a bullish chart pattern that takes place in an…

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How to Trade the Head and Shoulders Pattern

The head and shoulders chart pattern is a reversal pattern and most often seen in uptrends. Not only is “head and shoulders” known for trend reversals, but it’s also known for dandruff reversals as well. 😂 In this lesson, we’ll stick to talking about trend reversals and leave the topic of dandruff for another time. Head and Shoulders A…

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How to Trade Double Tops and Double Bottoms

When a double top or double bottom chart pattern appears, a trend reversal has begun. Let’s learn how to identify these chart patterns and trade them. Double Top A double top is a reversal pattern that is formed after there is an extended move up. The “tops” are peaks that are formed when the price hits a certain level…