Chart patterns in online trading explained.
Certain chart patterns that occur on the charts can potentially help traders
predict more accurately how the trend will behave and thus place their trades
accordingly. Patterns that might indicate a trend reversal or support and
resistance levels are: Head and shoulders Where a peak is followed by a higher
peak which is followed by another peak on the same level as the first peak.
Triple tops and triple bottoms. Where the trend reverses back inside the channel
three times once a resistance or support line is respectively met. Double tops and
double bottoms. Where the trend reverses back inside the channel twice once a
resistance or support line is respectively met. Penance. Where the trend
slows down before it breaks through the channel. Triangles. Where the trend is
moving within a triangle before breaking out it is important to note that while
chart patterns have an established definition and criteria there are no
patterns to tell you with 100% certainty where a security is headed