Using Trendlines: Why Kids Make Great Traders
As traders we have a tendency to surround ourselves with the latest and greatest thingamajig in hopes of making more money. But complex is not always better. Sometimes “complex” can…
Beginner Series: Basic Chart Patterns
Chart Patterns Tutorial
Traders have debated the merits of “technical analysis” versus “fundamental analysis” for years. In reality, most traders probably do not make such a rigid distinction between these two approaches to…
Support and Resistance
Technical analysis begins with identifying the trend line as early as possible, but there are times when that trend line or its parallel channel line will be tested by price…
Trend Lines and Channels
No matter what chart type you use, the first thing you should try to determine as a trader is the trend of market. You can use all kinds of clever…
Reversal Patterns
While a continuation pattern suggests that a trend in place will continue in the same direction after a brief pause/correction, a failed continuation pattern may well turn into a reversal…
Diamond Patterns
A reversal pattern that is relatively rare – or perhaps envisioning it is just more uncommon – is the diamond pattern, formed by a series of prices that rally into a high,…
Gap Patterns
Gaps are areas on a price chart where no trading occurs. The last bar’s low is higher than the previous bar’s high for a gap-higher move. The last bar’s high…
Continuation Patterns
A trend in motion tends to stay in motion, according to a rule of physics. In market language, trends tend to persist or at least move into a sideways pattern…
Ascending and Descending Triangle Patterns
Descending Triangle Another triangle pattern that could turn into a reversal pattern, either to the upside or downside, depending upon your time frame, is the descending triangle. To illustrate that…
Rising and Falling Wedge Patterns
Rising or falling wedge patterns are modifications of a triangle and can also lead to price reversals. As with the triangle, prices move into a narrower and narrower range as…
Pennant Patterns or Triangle Patterns
Sometimes continuation patterns take a form that can best be described as a symetrical triangle or pennant. Using the same chart below as the bear flag example, note that various…
Rounding Bottom or Cup-and-Saucer Patterns
Not all price patterns produce sharp, distinctive turns in price direction. It sometimes takes time for a top or bottom to emerge gradually over a number of price bars/candles. These…
Double Tops and Double Bottoms
Double Tops A previous high may act as a target for a new move to the upside or as a barrier that an uptrend may not be able to penetrate.…
“M” Tops and “W” Bottoms
A close cousin of the double top and double bottom are the M top and W bottom, so-called because of the letters formed when the thrust to a previous high…
Head-and-Shoulders Formation
Like some other patterns, a head-and-shoulders formation may be part of a larger continuation pattern, but it often indicates a change in market direction when the neckline of the pattern…
Technical Trading 101: How To Trade A Basing Bottom Formation
Trending Market Conditions either up or down, are easier to trade and most of the time Technical Traders do very well during Moderately Uptrending or Momentum Upside Market Conditions. However…
