Pattern
Recurring visual shape on charts, used to anticipate price movements.
Beginner-friendly explanation
A pattern is a visible shape on a price chart that traders recognize. Some patterns suggest price increases, others suggest drops.
Example: A “double top” pattern shows that price might fall after failing twice at the same level.
Intermediate-level insight
Technical patterns fall into two main families: Reversal patterns (e.g., head and shoulders) and Continuation patterns (e.g., bullish flag). They are analyzed alongside volume and broader trend.
Example: An ascending triangle in an uptrend, with falling volume then breakout, may signal continued rise.
Advanced perspective
Pattern analysis is based on historical probabilities and reliability studies. Advanced tools like harmonic figures, fractals or statistical models enhance interpretation.
Example: Studying the success rate of a “cup & handle” pattern in historical data helps integrate it into a trading algorithm.
Technical Analysis & Charting
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