Chart Patterns XII: Rectangles

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The rectangle formation is often a very simple one to recognize. It is essentially a market that is trading in a range between two horizontal lines. The rectangle formation represents consolidation of the move that preceded it, creating a foundation … Continued

Chart Patterns IV: Double Tops and Bottoms

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The double top formation is a straightforward pattern that is easy to recognize on a chart. One of the features of a market in an uptrend is a series of increasing highs and relatively higher lows. If the market on … Continued

Chart Patterns II: Rules for identifying Reversal Patterns

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The following are the three basic tenets about identifying reversal patterns. While they may seem obvious and even simplistic, they are important for successfully using these patterns. A Trend Must Exist – A trend must exist before a reversal of … Continued

Chart Patterns I: Introduction to Reversal Patterns and Continuation Patterns

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There are two major ways to trade the financial markets: swing trading and trend following. Swing traders use technical analysis to look for short-term price movement and capture gains in a relative short-term period. They look for the price patterns … Continued

Candlestick VII: Candlestick Patterns Confirming Reversals

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Candlestick patterns are used to confirm reversals. Often when a price moves towards a support or resistance level, it is unclear for several periods on the chart whether it is going to break through or reverse. Intraday penetrations of important … Continued

Candlestick VI: Using Candlestick Patterns in Trending Markets

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Using candlestick patterns to trade trending markets can be an extremely useful tool to profit from exchange rate movement. The process is simple: Identify the overall trend Look for a retracement Look for a candlestick pattern to confirm a reversal … Continued

Candlestick V: Using Candlestick Patterns in a Range bound Market

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In a range bound market – meaning a market that does not possess a clear directional trend, but rather moves back and forth between support and resistance – traders are essentially looking to short at the top of the range, … Continued

Candlestick IV: Thrust Day and Run Day

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A thrust day An up-thrust day is when the close for the current period surpasses the previous period’s close. A down-thrust day is when the close for the current period is below the previous period’s close. Similar to spike and … Continued

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