Charts maps out the past movements of
the market. It's like a history book, only it gives a history of
prices. As the most famous history phrase goes “history repeats
itself,” often true and gives us the vantage of learning from
past mistakes without actually experiencing it. The same goes for
Forex.
After spending sometime analyzing and
monitoring charts, you will most probably observed that some
formations found in the chart are often repeating. Patterns
as they were called. The patterns may vary depending on the chart
that you're using. Candlestick charts have different patterns than
those of the bar chart. Through the course of time, numerous patterns
have already emerged but those classical ones are the famous among
them.
Classical Patterns:
- Head and Shoulders
- Trend lines
- Triangles
- Wedge
- Flag and pennant
- Price
- Broadening top
- Triple top and bottom
- Double top and bottom
- Cup and handle
Some are claiming that they can predict
future price movements through these patterns. But the pessimistic
ones are rebuking the claim and telling that those patterns are just
mere economic illusions. Honestly, I'm really not a hundred percent
sure on which is which but I think it's now up to the trader to
decide.
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