Most Used Chart Patterns in Stock Market Detailed Explanation
To become a successful trader in stock market one must know these important chart patterns to identify trading opportunities in price trends Head and Shoulders: H&S pattern mostly indicates a bullish trend turning into a bearish one. The pattern appears as a baseline with three peaks, where the outside two are close in height and middle is the highest. first and third peaks are shoulders and the second peak forms the head Left Shoulder Head Right Shoulder Line drawn along the intermediate lows is Neckline. The pattern is considered completed only when the price having formed the right shoulder falls below the neckline. Cup and Handle : The cup & handle is considered a bullish pattern. this pattern resembles a cup with a handle where the cup is in the shape of a U and the handle has a slight downward drift. Cups with wider U shapes are more reliable then V shapes, this formation can take anywhere from 2 months to over 1 year to form Wedge : A wedge is a price pa...