What Happens after a Reversal Chart Pattern? - What Happens after a Bullish and Bearish Reversal Chart Pattern?

A reversal pattern is a pattern formation that signals the current market trend might reverse once these reversal chart pattern is confirmed.

The reversal chart pattern shows that momentum of the current trend is declining & therefore should the reversal chart pattern be completed then the market trend might reverse and begin moving in opposite direction.

If a reversal chart pattern forms in an upward trend then traders should wait for the pattern to be confirmed before opening trades in the opposite direction. Once a reversal chart pattern is confirmed by the price moving below the support level of the reversal chart pattern then traders can consider this bearish reversal chart pattern to be confirmed signaling that the market trend has changed from an upward trend to a downward trend.

If a reversal chart pattern forms in an downward trend then traders should wait for the pattern to be confirmed before opening trades in the opposite direction. Once a reversal chart pattern is confirmed by the price moving above the resistance level of the reversal chart pattern then traders can consider this bullish reversal chart pattern to be confirmed signaling that the market trend has changed from a downward trend to a downward trend.