Know the Trends for Profitable Trading
Most people dealing in stocks will be looking for some confirmation about how the markets will behave. You will be happy to know that there are certain indications that you can use for planning your buying or selling of shares. Experts in the trade have analyzed the movement of prices and come up with certain repetitive price movements that can indicate whether the prices will fall or rise. They have found out some patterns in the trade movement that can give some indication of the future price. The patterns are named after the shape they form.
What Do The Triangles Tell You? The triangle pattern is an important one in the technical analysis of the price movement of shares. The triangle is called a continuation pattern which means that whatever way the prices were moving; they will continue to move in the same direction after the pattern. The triangle is formed using the lower and upper trend lines that connect the price extremes. There are three types in the triangle pattern namely the ascending triangle , descending triangle, and symmetrical triangle. Each one can be taken as an indication of the price movement.
How To Trade After A Bull Flag Pattern? The bull flag is another pattern that you can use to plan your stock trading. This pattern is a clear indication of a bullish period for the stocks. The bull flag is represented by a sharp rise in the price which forms the staff of the flag. After the sharp rise, the market will normally steady itself. There will be price variations but the price will continue to come back to the higher position. This up and down period will form the flag portion. The upper and lower trend lines are parallel indicating the price movements are steady.
What to Read from A Cup And Handle Pattern? The cup and handle pattern can both be a continuation pattern or a reversal pattern. This will depend on the price movement before the pattern starts. If the price movement has been upward then the pattern represents a continuation pattern. If the movement was downward then it represents a reversal of trends. The cup is formed when the price reaches a low point and then rises to the level where the pattern started. There is a further drop in price which will represent the handle.
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