What are Forex Chart Patterns? - Forex Chart Patterns Strategy
Forex chart patterns are chart representations of repeating price action pattern formations that are commonly used in the forex market.
Forex chart patterns is one of the studies used in technical analysis to help forex traders learn how to recognize these repeating chart patterns formations.
Forex chart patterns are important in Forex trading because when the market is not moving in a particular direction it is forming a Forex chart pattern. It is important to know these formations so as to have an idea of what might be the next move in the Forex trading market.
When forex trading price movements are plotted there are several formations that occur naturally and repeat themselves over and over again. These Forex chart patterns formations are used by a lot of technical forex traders to predict the next forex market movement.
Forex traders often study these Forex chart patterns formation to analyze supply and demand forces that form the basis for price fluctuations of a particular currency pair.
These Forex chart patterns are classified in to Three different categories:
1. Reversal Trading Patterns
- Double Top Patterns
- Double Bottom Chart Patterns
- Head and Shoulders Patterns
- Reverse Head & Shoulders Patterns
2. Continuation Trading Patterns
- Ascending Triangle Patterns
- Descending Triangle Patterns
- Bull Flag/Pennant Chart Patterns
- Bear Flag/Pennant Patterns
3. Bilateral Forex Trading Chart Patterns
- Symmetric Triangle - Consolidation Patterns
- Rectangle - Range Forex Chart Patterns
Reversal Trading Patterns confirm the reversal of the market trend once this reversal chart patterns setup is confirmed. These reversal chart patterns are formed after extended market trend either upwards or downwards & these patterns trading signal that the forex market trend is ready to reverse.
Continuation Chart Patterns are formations which set up the market for a trend continuation move in direction of the prior Forex trend. These continuation patterns are formed when the market is taking a break before continuing in the same direction of the previous Forex trend.
Consolidation Patterns form when the forex market is taking a pause before deciding the next direction to take. When these consolidation patterns are formed the market is trying to decide what direction to trade.
Chart Patterns Lessons
Forex Chart Patterns - Study of a candlesticks patterns
Forex Patterns - Forex Chart Patterns Strategy
