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Tradeonix chart patterns profit by Russ Horn
What I will cover here are some of my favorite chart patterns that will deliver a higherthan- average probability of a successful trade.These patterns are reliable and many traders watch for these.Because of the number of traders waiting to trade these patterns, they have a kind of “self-fulfilling prophecy” thing going on.
They are more likely to work out simply because the big money trades them too.
These patterns are important because when you see these patterns develop, you will have a better idea which way the market will move as a result.
There are trend following patterns, or “continuation” patterns, and there are counter trend, or “reversal” patterns, and there are Neutral patterns in which the market can break out in either direction.
Trend following patterns:
1. Pennant
2. Flag
3. Rectangle
Trend reversal patterns:
1. Wedge
2. Head and Shoulders
3. Double Tops/Bottoms
Neutral patterns:
1. Symmetrical Triangle
2. Ascending/ Descending Triangle
3. Rectangle
Flag pattern :
A Flag pattern is a take-a-break pattern as well. It starts off generally with a large quick move forming a fairly steep “pole”. Next comes the Flag formation as it gently moves up and down slightly against the initial move.
To be a true Flag, the formation takes place between two equally separated lines, a small support and resistance channel. The Bear Flag is formed as a slightly rising formation while a Bull Flag is a slightly falling formation.
After a large initial market move, there is a period of “covering”. That basically means traders who were in the initial large move are closing their positions. Some are closing their positions while others are opening new positions in the same direction as the initial move. This simultaneous buying and selling is like a tug-of-war between the bulls and the bears and the market doesn’t have the momentum to move in either way.
Once the open positions are covered, the remaining open positions and with the addition of the new positions will usually force price to take off in its initial direction.
