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Trading Reversal Chart Patterns and Continuation Chart Patterns - Reversal vs Continuation Patterns

Forex Chart Patterns - Forex Technical Analysis Chart Patterns Forex Trading Strategies

Forex chart patterns are graphical representations of repeating forex price action formations that are commonly used in the forex market.


Forex Chart Patterns is one of the studies used in forex technical analysis to help forex traders learn how to recognize these repeating Forex Chart Patterns formations.


These Forex Chart Patterns are important in Forex trading because when the forex market is not moving in a particular direction it is forming a chart pattern. It is important to know these Forex Chart Patterns formations so as to have an idea of what might be the next move in the forex market.


When forex price movements are plotted there are several Forex Chart Patterns formations that occur naturally and repeat themselves over and over again. These Forex Chart Patterns formations are used by a lot of forex technical traders to predict the next forex market move.


Forex traders often study these Forex Chart Patterns formations to gauge supply and demand forces that form the basis for forex price fluctuations.


These Forex Chart Patterns are classified into 3 different categories:


1. Reversal Forex Chart Patterns


  • Double tops Forex Chart Patterns


  • Double bottoms Forex Chart Patterns


  • Head and Shoulders Forex Chart Patterns


  • Reverse head and shoulders Forex Chart Patterns



2. Continuation Forex Chart Patterns


  • Ascending triangle Forex Chart Patterns


  • Descending triangle Forex Chart Patterns


  • Bull flag/pennant Forex Chart Patterns


  • Bear flag/pennant Forex Chart Patterns



3. Bilateral


  • Symmetric triangle - Consolidation Forex Chart Patterns


  • Rectangle - Range Forex Chart Patterns




Reversal patterns - Forex Chart Patterns - confirm the reversal of the forex market trend once this reversal chart pattern setup is confirmed. These Reversal Forex Chart Patterns are formed after extended forex market trend either upward or downwards and these reversal patterns signal that the market is ready to reverse.


Continuation patterns Forex Chart Patterns - are formations that set up the market for a trend continuation move in the direction of the prior Forex trend. These Continuation Forex Chart Patterns are formed when the market is taking a break before continuing in the same direction of the previous Forex trend.


Consolidation patterns Forex Chart Patterns - form when the market is taking a break before deciding the next direction to take. When these Consolidation Forex Chart Patterns are formed - the market is trying to decide which direction to trade.


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Technical Forex Chart Analysis of Forex Chart Patterns

There are two types of forex chart analysis, these two may seem similar but are not: the two are:





  • Forex Chart Patterns - Study of a series of forex candlesticks formations



(This learn forex trading tutorial is about the second option above - Forex Chart Patterns)



The different topics for these two types forex trading analysis are:


Japanese Forex Candlesticks















Forex Chart Patterns Tutorials










The examples below also illustrate the difference of the formations of these two forex technical analysis methods.


Candlesticks Patterns - Study of a single candlestick

Japanese Candlesticks Patterns in Forex Trading - Candlesticks Patterns Technical Analysis



Forex Chart Patterns - Study of a series of forex candlesticks

Example of a Consolidation Forex Chart Patterns - Forex Chart Patterns Analysis

 

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