Two or three chart patterns are responsible for 70% of my successful Forex and stock trades. Learn these amazing chart patterns and use them in your daily trading and start making big money.
1. Weakening Waves Pattern
Price always moves as waves. A bull move gets weaken and then reverse to a bear move and vice versa. You can use this property to exploit financial assets chart patterns. The following picture shows a weakening bear wave on FTSE (UK100) stock future 1H chart. Pay attention that each wave gets weaken (narrower range) until a reversal take place. This reversal is an ideal point to buy. Deviation from mean and resulting upward pull force guarantees the upward move.
The below picture shows a similar weakening bear wave pattern on spot gold 4H chart. Price rejections at support level guarantee that this is a true reversal.
2. Head and Shoulders Pattern
Head and shoulders is one of the most frequent and accurate patterns on financial charts especially stocks and stock futures. The critical challenge in trading head and shoulders pattern is making sure that it is a true pattern. One way to do this is checking the right side shoulder for price rejection pin bars. If there exist such pin bars it means that with a very high probability (greater than 0.8) the pattern is true and you can open a trade there. Lacking such price rejection pins is a warning for you that the pattern may be false and the price heads toward the unwanted direction. On the following pictures you can find two head and shoulders patterns on gold chart. Pay attention to pins on the right side shoulders.
Head and shoulders is one of the most frequent and accurate patterns on financial charts especially stocks and stock futures. The critical challenge in trading head and shoulders pattern is making sure that it is a true pattern. One way to do this is checking the right side shoulder for price rejection pin bars. If there exist such pin bars it means that with a very high probability (greater than 0.8) the pattern is true and you can open a trade there. Lacking such price rejection pins is a warning for you that the pattern may be false and the price heads toward the unwanted direction. On the following pictures you can find two head and shoulders patterns on gold chart. Pay attention to pins on the right side shoulders.
3. Triangle Pattern
Another accurate, highly probable chart pattern is triangle pattern. In this pattern bull and bear bars are followed consequently in a triangle shape. In trading this pattern the critical point is determining the direction of the move. Price rejections pin bars and the pressure resulting from deviation from mean are great signs to predict this direction and enter a profitable trade. The following example shows a triangle pattern on gold 4H chart. Pay attention to big deviation from mean.
Another accurate, highly probable chart pattern is triangle pattern. In this pattern bull and bear bars are followed consequently in a triangle shape. In trading this pattern the critical point is determining the direction of the move. Price rejections pin bars and the pressure resulting from deviation from mean are great signs to predict this direction and enter a profitable trade. The following example shows a triangle pattern on gold 4H chart. Pay attention to big deviation from mean.
4. Double and Triple Top/Bottom Patterns
These patterns are very common and fairly accurate to trade especially if they occur at major support or resistance levels. Price rejection at support or resistance levels makes these patterns even more reliable. The following is a double bottom pattern on gold chart. Pay attention to the pins.
These patterns are very common and fairly accurate to trade especially if they occur at major support or resistance levels. Price rejection at support or resistance levels makes these patterns even more reliable. The following is a double bottom pattern on gold chart. Pay attention to the pins.
Here I showed you some of the best chart patterns to trade Forex, gold and stocks. To find more information about other highly profitable chart patterns (including sandwich and abandoned baby patterns which are 90% accurate and consist 70% of my trades), please follow the below link.