What are Forex Chart Patterns? - Forex Chart Patterns Strategy
Forex chart patterns are chart representations of repeating price action pattern formations that are commonly used in the forex trading market.
Forex chart patterns is one of the studies used in technical analysis to help forex traders learn how to recognize these repeating chart patterns formations.
Forex chart patterns are important in Forex trading because when the market is not moving in a particular direction it is forming a Forex chart pattern. It is important to know these formations so as to have an idea of what might be the next move in the Forex trading market.
When forex price movements are plotted there are several formations that occur naturally and repeat themselves over and over again. These Forex chart patterns formations are used by a lot of technical forex traders to predict the next forex trading market movement.
Forex traders often study these chart patterns formation to analyze supply and demand forces that form the basis for price fluctuations of a particular currency pair.
These Forex chart patterns are classified into Three different categories:
1. Reversal Trading Patterns
- Double Top Patterns
- Double Bottoms Patterns
- Head & Shoulders Patterns
- Reverse Head and Shoulders Patterns
2. Continuation Trading Patterns
- Ascending Triangle Patterns
- Descending Triangle Chart Patterns
- Bull Flag/Pennant Patterns
- Bear Flag/Pennant Patterns
3. Bilateral Forex Trading Patterns
- Symmetric Triangle - Consolidation Patterns
- Rectangle - Range Forex Chart Patterns
Reversal Patterns confirm the reversal of the market trend once this reversal chart patterns setup is confirmed. These reversal chart patterns are formed after extended market trend either upwards or downwards & these patterns signal that the forex market trend is ready to reverse.
Continuation Patterns are formations that set up the market for a trend continuation move in direction of the prior Forex trend. These continuation patterns are formed when the market is taking a pause before continuing in same direction of the previous Forex trend.
Consolidation Patterns form when the forex 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.
Chart Patterns Tutorials
Forex Chart Patterns - Study of a candlesticks chart patterns
Forex Patterns - Forex Chart Patterns Strategy
