3 types of chart patterns in technical analysis


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The market does move dynamically, but market patterns often repeat their history. Studying the types of chart patterns can provide useful advantages in trading in financial markets, whether in forex, crypto, index, commodity, or ETF CFD trading.

Refers to the FXOpen blog article, there are 3 types of chart patterns that traders need to learn
  • Reversal pattern
  • Continuation Patterns
  • And Bilateral Patterns

Reversal patterns reflect patterns that have the potential for a reversal or change in trend. Trend changes can be an early warning for traders to make trading setups or exit before the trend changes.

Continuation Patterns reflect market patterns that have the potential for trend continuation. This pattern has the characteristics of a temporary trend pause, consolidation phase, and resumption of the trend.

Bilateral Patterns reflect market patterns which are indecision markets, here the trend may continue or may reverse.

If traders can recognize these chart patterns, they can potentially develop their trading skills to get the right trading plan setup.
Yes, such models are not bad at helping to navigate the market situation. But the models work much better when trading takes place on higher timeframes. And the potential for price movement on such timeframes is large if some figure or pattern works. As a result, the trader gets the opportunity to make good money.
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