Jun22

Double Top Chart Pattern

by admin on June 22nd, 2011
Posted In: Learn, Pattern, Double Top

What is the Pattern
Double top is a well known bearish reversal move, it occurs when the price roughly hit a high level twice without breaking it, because it forms like “M” it has the character name.

Double top pattern is a signal that the buyers start to lose interest and the market is exhausted of buying

How it forms:
It occurs when the price faces a resistance level in an uptrend momentum, after small pullback the price start to go up again trying to break the resistance levels, we got a complete pattern when the price cannot break the resistance line and go down in a reversal move.

In the general trading world you must wait for specific signal to take a trading decision, we have the same for this pattern, usually the price doesn’t hit exactly the same level, it’s enough to be close to the first peak.

This pattern is one of the most seen and recognized pattern, so before jumping to the trade, wait for a signal like breaking support level or a trend line, this pattern could mislead you and resume the uptrend momentum again.

Traders must pay more attention to indicators, using indicators is important to monitor and register the two peaks points,

 

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Mar02

Candlestick Forex patterns

by admin on March 2nd, 2011
Posted In: definitions, Learn, Trades

Japanese candlestick was used first time by Japanese in rice trading, and now it’s important method of technical price, it tells more about the price movement in the market. 

Traders used to take decisions based on the candlestick shape, every shape send different message to the trader; it depends on the body size compared by the shadow tall. 

Spinning Tops,
This is the first pattern we have here, spinning tops is a small body with a long upper and lower shadow, the color doesn’t matter in this pattern, it means the market is moving between equal force, the buyers are almost equal the sellers. 

Candlestick pattern

Candlestick pattern

Long shadow in this candlestick indicates a big move in the market with a small changing in the open and close prices.

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Feb28

Chart patterns support and resistance levels

by admin on February 28th, 2011
Posted In: definitions

Support and Resistance
Price is forming a zigzag shape, it records a high level, then it reverses to record a low level, this zigzag is forming according to support and resistance levels, when the price touch a high point then start to reverse, this is a resistance level, the price touches a low level then start to resume to the up direction, this low level is a support.

Support and resistance levels guide traders to determine start and end trading points, these levels not easy to be broken, it could be touched several time from the price before broken.

These kind of levels are static, looking at a big area of the chart is enough to recognize the static levels, just look at the line where prices find difficult to pass. Static level means there is a fixed levels where be touched by the price, breaking support or resistance levels required a strong trend enough to pass the zone.

Another kind of levels is dynamic resistance and support levels, it means there is no fixed level for support and resistance levels, that what we see in charts pattern, when you have an impulsive wave, it followed by a bull back, this reversal move stopped at a 61.8 Fibonacci level, it’s not a fixed line, but the price stop there regardless of the price.

Using the Fibonacci retracement tool helps you to determine these levels easily, just pick the tool and define the highest and lowest points in your impulsive wave, then the tool will highlight the Fibonacci retracements levels (38, 61, 78) in your chart.Support and Resistance Levels

Dynamic levels are forming the pattern, it varies from pattern to another, dynamic levels in Garetly pattern will not be the same in butterfly or bat or crab pattern, every pattern has its own dynamic levels, but all could be determined using Fibonnaci levels. But every batter stops at a specific level which is different from the other.

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Feb23

Chart Pattern Technical Analysis

by admin on February 23rd, 2011
Posted In: Learn, Fibonacci, Learn, Learn, Pattern

Trades are using two main methods for trading, Fundamental analysis and technical analysis, Fundamental Analysis is the trading based on economic, social and political analyses.

In the other hand traders are using the historical price movement to trade, using historical data movement and indicators called technical analysis. You can predict and determine the price next move by analysis and trace the historical price movement.

Pattern trading is build in technical analysis theory, the fixed resistance and support levels we have are generated from previous successful trades, based on these trades we have a specific levels which forms the pattern.

For a successful pattern trades, it’s important to keep an archive of any trade you had, create an excel file with your data and write note about each one, sooner you’ll find a groups of pattern are repeated. It’s important to know and understand the common points between your trades to be considered in the next trade.

By the time you’ll find yourself pay more attention to a specific pattern which always work with you, it could be Garetley, butterfly, bat or crab pattern, traders study only one pattern, start tracing it and understand pattern movement then make the trades.

Technical analysis is the main key to pattern traders; it includes an indicator that gives you the sign in the right time about the trade. Keep in mind the support and resistance levels, there are many strong reversal levels in the chart, go back to last year chart and notice the most important support and resistance levels, you’ll find it a considered levels for price reversal in any time.

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Feb21

Extract Pattern from Elliot Waves

by admin on February 21st, 2011
Posted In: DayTrading

To recognize the pattern you need to look at the chart in many different ways, it’s difficult to recognize the pattern just by one look, but if you’re using specific steps with an indicator signal it’ll be much easier to see the pattern easily.

 Forex moves in a series of ups and down waves, any up trend wave must be followed by a down trend wave, this is what we see when we look at Forex charts, but still we have the same questions, how can we recognize the pattern charts??

 These waves called Elliot Wave, and in this article you’ll find more about Elliot waves definitions, if you take a closer look at every wave in a smaller time frame you’ll find a harmonic pattern forms the wave’s moves.

Just open 4hr time frame chart in any currency pair, and take any impulsive wave, then count the Elliot 5 waves to recognize the trend, if you take any wave to a lower time frame, 30 min for example you’ll find a clear harmonic pattern is forming. From this time frame you can take the top, bottom points to define the expected support and resistance levels for the pattern.

Half way to a successful trades, Elliot waves also gives you the necessary confidence that you’re in the right track, when you see the waves are moving like your calculations, it means you have the right methods for the trade and you can take the profit from such trade.

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