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Trading Reversal Chart Patterns and Continuation Chart Patterns - Forex Charts Analysis of Chart Patterns

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.


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


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


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


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


These Chart Patterns are classified into 3 different categories:



1. Reversal Chart Patterns

  • Double tops Chart Patterns
  • Double bottoms Chart Patterns
  • Head and shoulders Chart Patterns
  • Reverse head and shoulders Chart Patterns



2. Continuation Chart Patterns

  • Ascending triangle Chart Patterns
  • Descending triangle Chart Patterns
  • Bull flag/pennant Chart Patterns
  • Bear flag/pennant Chart Patterns



3. Bilateral

  • Symmetric triangle - Consolidation Chart Patterns
  • Rectangle - Range Chart Patterns



Reversal patterns - Chart Patterns - confirm the reversal of the forex market trend once this reversal chart pattern setup is confirmed. These Reversal 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 Chart Patterns - are formations that set up the market for a trend continuation move in the direction of the prior Forex trend. These Continuation Chart Patterns are formed when the market is taking a break before continuing in the same direction of the previous Forex trend.


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


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Technical Forex Chart Analysis of Chart Patterns

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


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


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



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


Japanese Forex Candlesticks



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 - Forex Technical Analysis of Candlesticks Patterns



Chart Patterns - Study of a series of forex candlesticks

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

 

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