Bearish patterns in trading
The second part of my post is about patterns in trading.
Today we will talk about "bearish" after the formation of which the price falls.
1. Three falling peaks
Not the most popular, but possible pattern. A special condition - the highs of the price must be united by one trend line, which is located with a slope to the right. As in most patterns, the formation of a pattern is preceded by a clear trend. Selling - after falling behind the bottom line.
2. Double top
Two equivalent price highs with an emphasis on the price level. You should open a sell after the price completely forms a figure and breaks the bottom line. In some cases, the formation of a Triple Top pattern is possible.
3. Head and shoulders
Consists of three peaks: right and left shoulder and head. All three rest on one level - the neck. The pattern is preceded by an obvious upward trend. After the formation of the second shoulder and breaking through the neckline (or better - fixing on it), we can expect a fall by the volume of the previous trend.
4. Inverted cup with handle
"Soft" price reversal in an arc based on the base line. It is important to remember that after the "cup" is formed, a "handle" is also formed, usually with a volume of 1/3 of the main movement. Do not rush to enter the trade, wait for the breakdown of the base line.
5. Descending triangle
The conditions for the formation of a pattern are a clear uptrend before entering the pattern + at least 5 touches of trend lines. After the breakdown of the trend support, we wait for consolidation and start selling.
6. Wedge
This pattern is very similar to the "Triangle" with the difference that trend lines do not cross in the foreseeable future and price fluctuations do not get much weaker closer to the completion of the pattern. But in general, the logic of selling is the same - consolidation after the breakdown of the support line and a fall by the volume of the previous trend.
These are not all possible patterns, of course.
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Share your opinion in the comments and support the idea with likes.
Thank you for your support!
Today we will talk about "bearish" after the formation of which the price falls.
1. Three falling peaks
Not the most popular, but possible pattern. A special condition - the highs of the price must be united by one trend line, which is located with a slope to the right. As in most patterns, the formation of a pattern is preceded by a clear trend. Selling - after falling behind the bottom line.
2. Double top
Two equivalent price highs with an emphasis on the price level. You should open a sell after the price completely forms a figure and breaks the bottom line. In some cases, the formation of a Triple Top pattern is possible.
3. Head and shoulders
Consists of three peaks: right and left shoulder and head. All three rest on one level - the neck. The pattern is preceded by an obvious upward trend. After the formation of the second shoulder and breaking through the neckline (or better - fixing on it), we can expect a fall by the volume of the previous trend.
4. Inverted cup with handle
"Soft" price reversal in an arc based on the base line. It is important to remember that after the "cup" is formed, a "handle" is also formed, usually with a volume of 1/3 of the main movement. Do not rush to enter the trade, wait for the breakdown of the base line.
5. Descending triangle
The conditions for the formation of a pattern are a clear uptrend before entering the pattern + at least 5 touches of trend lines. After the breakdown of the trend support, we wait for consolidation and start selling.
6. Wedge
This pattern is very similar to the "Triangle" with the difference that trend lines do not cross in the foreseeable future and price fluctuations do not get much weaker closer to the completion of the pattern. But in general, the logic of selling is the same - consolidation after the breakdown of the support line and a fall by the volume of the previous trend.
These are not all possible patterns, of course.
--------------------
Share your opinion in the comments and support the idea with likes.
Thank you for your support!
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