Trading Reversal Chart Patterns & Continuation Patterns - Reversal vs Continuation Patterns

Patterns - Technical Analysis Chart Patterns Trading Strategies

chart patterns are graphical illustrations of repeating trading price action formations that are commonly used in the market to analyze price movement.

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

These Forex Patterns are important in Forex trade because when the market isn't heading in a particular direction it is forming a chart pattern. It is important to know these Forex Chart Patterns patterns so as to have an idea of what might be the next likely move in the market.

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

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

These Forex Patterns are classified into Three different categories:

1. Reversal Patterns

• Double tops Forex Patterns

• Double bottoms Forex Patterns

• Head & Shoulders Patterns

• Reverse head & shoulders Forex Patterns

2. Continuation Trading Pattern Setups

• Ascending triangle Forex Patterns

• Descending triangle Forex Patterns

• Bull flag/pennant Patterns

• Bear flag/pennant Patterns

3. Bilateral

• Symmetric triangle - Consolidation Patterns

• Rectangle - Range Forex Patterns

Reversal Patterns - Reversal Patterns - confirm the reversal of the market trend once this reversal chart pattern setup is confirmed. These Reversal Chart Patterns are formed after extended market trend either upwards or downward & these reversal patterns signal that the market is ready to reverse.

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

Consolidation patterns Forex Patterns - 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 what direction to trade.

Technical Forex Chart Analysis of Patterns

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

• Japanese Candlesticks Patterns - Study of a single candle - Read Japanese Forex Trading Candlesticks Patterns

• Patterns - Study of a sequence of candlesticks formations

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

The different topics for these two types trading analysis are:

Japanese Candles

• 39. Marubozu Candlestick Pattern & Doji Candle Pattern

• 40. Spinning Tops Candlesticks Pattern Setups

• 41. Reversal Candlesticks Pattern Setups

• 42. Inverted Hammer Candle Pattern & Shooting Star Candle Pattern Candle Sticks Pattern Setups

• 43. Piercing Line Candle-stick Pattern & Dark Cloud Cover Candle Pattern Candle Sticks Pattern Setups

• 44. Morning Star Candle Sticks and Evening Star Candle Sticks Pattern Setups

Patterns Lessons

• 53. Double Top and Double Bottom Patterns

• 54. Continuation Patterns

• 55. Consolidation Trading Pattern Setups

• 56. Head & Shoulders Chart Patterns & Reverse Head & Shoulders Pattern Setups

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

Candlesticks Patterns - Study of a single candle

Patterns - Study of a sequence of candles