Easy Ways to Understand Chart Patterns
A chart pattern is a price chart pattern that occurs repeatedly in the market, making it easy for traders to identify. Chart patterns are used as the basis for technical analysis in trading stocks, forex, commodities, and others. Price movements in charts tend to repeat themselves and form the same pattern, so traders can predict future price movements by looking at price history that has formed in the past.
Each pattern has a different shape and meaning. Chart patterns can be useful for traders to predict prices will continue or even decline. This technique is also useful for finding potential entry points. Mastering the chart pattern technique is one of the easy analyzes in trading strategies without indicators.
There are types of chart patterns that traders must know, namely continuation chart patterns, reversal patterns, and bilateral chart patterns.
Continuation chart pattern appears as a signal for the continuation of the price from the previous trend. The chart pattern technique in the continuation pattern is very useful for filtering signals that identify a temporary correction of the main trend. In other words, after the pattern finishes forming, the price will most likely return to the previous main trend.
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