Trading Reversal Patterns and Continuation Chart Setups

Chart Patterns - Technical Analysis Chart Patterns Stocks Strategies

trading patterns are graphical illustrations of repeating price action patterns that are commonly used in the market.

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

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

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

Traders often study these Chart Patterns patterns to measure supply and demand forces that form the basis for price fluctuations.

These Stock Setups are classified in to Three different categories:

1. Reversal Trading Setups

• Double top Chart Setups

• Double bottom Chart Setups

• Head & shoulders Chart Setups

• Reverse head & shoulders Chart Setups

2. Continuation Trading Setups

• Ascending triangle Chart Setups

• Descending triangle Chart Setups

• Bull flag/pennant Chart Setups

• Bear flag/pennant Chart Setups

3. Bilateral

• Symmetric triangle - Consolidation Chart Setups

• Rectangle - Range Chart Setups

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

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

Consolidation patterns Chart Setups - 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.

Technical Chart Analysis of Chart Setups

There are 2 different types of chart analysis, these two may seem similar but are not: the two are:

• Japanese Candlesticks Patterns - Study of a single candlestick - Read Japanese Candles Patterns

• Patterns - Study of a series of candlesticks formations

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

The different topics for these two types stocks analysis are:

Japanese Candle-sticks

• 39. Marubozu Candle Pattern and Doji Candlestick Pattern

• 40. Spinning Tops Candle-sticks Setup Patterns

• 41. Reversal Candle-sticks Setup Patterns

• 42. Inverted Hammer Candle-stick Pattern and Shooting Star Candlesticks Setup Patterns

• 43. Piercing Line Stocks Candle-stick Pattern and Dark Cloud Cover Candlesticks Setup Patterns

• 44. Morning Star Candlesticks and Evening Star Candlesticks Setup Patterns

Stock Setups Tutorial Guides

• 53. Double Top & Double Bottom Setups

• 54. Continuation Trading Setups

• 55. Consolidation Trading Setups

• 56. Head & Shoulders Patterns and Reverse Head and Shoulders Setups

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

Candles Patterns - Study of a single candlestick

Patterns - Study of a series of candlestick s