Trading With Pattern

Trading With Pattern. Being a Trader is not just enough to just know how these tools work, but we must also learn how to use. For let us summarize the chart patterns that we have learned and sort them according to the signal they have given. To shorten the time, please check out his review below:

Reversal (Reversal)

On pattern reversal chart formations is giving a signal that current trends that are taking place are ready to change direction. When the shape of the graph pattern reversal occurs during an uptrend, it is an indication that the trend will end soon and the offing will downtrend. And conversely, if the chart patterns that look happen during a downtrend, this indicates that the price will soon go up.

I will try to discuss 6 chart pattern that signals a reversal.

• Double Top
• Double Bottom
• Head and Shoulder
• Inverse Head and Shoulder
• Rising wedge
• Falling Wedge

To be able to do trading with chart pattern, you can simply do a pending order (Buy/Sell Stop Stop) on the outside of the neck line and the direction of the new trend. With your install target (Take Profit) which is almost the same length and height of the formation. Take for example for example, if you look at the chart, double bottom, place a stop order to buy at the top of the neck/neckline and install the Take Profit targets as high as the distance from the base of the keleher.

For the sake of proper risk management, do not forget to place a stop loss. A reasonable stop loss can be set around the middle of the formation of the graph. For example, if you can measure the distance from the bottom of this double top, then divide into two, and use that as the size of the stop loss.

Continuation (Continuation)

Usually the pattern is also known as a Consolidation Pattern (the pattern of consolidation), because they show how a buyer or seller is able to rest briefly before continuing the trend of previous kesesi. The following display pattern continuation:

In order to trade with these patterns, you can simply put a buy stop above the formation or sell stop below the target by determining formations take profit (TP) in length at least equal to the chart patterns that are formed. For Pennants, you can specify a higher target by measuring the "pole" before the formation took place. For advanced pattern, stop loss is usually placed above or below the chart formation breakout. For example, when bearish trading, rectangle, where you place a stop loss is a few pips above the translucent support.

Bilateral

Bilateral chart pattern is a little more complicated because the price can be translucent over and down. Here's a picture of the graph bilateral:

To be able to play this pattern, you must consider both scenarios (upside or downside breakout) by placing an order on formation and another one on the lower part of the formation (buy stop or sell stop). If one of the orders that have been triggered, you can cancel the other. The only problem is that you can get false breakout if you set up Your entry order is too close to the top or bottom of the formation.

Once you know what types of patern, so be careful and do not forget to place a stop loss.

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