In traditional technical analysis one of it's many concepts are Trend Reversal Chart Patterns.
The more common would be the following:
1) Head and Shoulder
2) Double/Triple Tops and Bottoms
3)Rounding Tops/Bottoms
4)Cup and Handle
These variety of patterns do occur in market action,but I think there is an inclination for traders to try to search for them at the wrong places in market cycles. A basic tenet that I adhere to is that if you need to "search" for it then it is not there. If it is not obvious then don't let your imagination go wild and create the pattern. Likewise, it should develop after an extended or mature price trend. We should avoid designating patterns when trends have just begun and is in the process of developing into a more sustainable trend. When trends begin don't start looking for reversal patterns at it's early stages. If these patterns pop up after let's say an extended up or down move lasting for many periods , days amd months then the reliability factor of it's validity increases. Why? simply stated it is at the right place at the right time.
So, don't spend your time lookng for these patterns to show up at "every" turn or swing in price activity. When it is truly there it will "pop out" and stare at your face.
The more common would be the following:
1) Head and Shoulder
2) Double/Triple Tops and Bottoms
3)Rounding Tops/Bottoms
4)Cup and Handle
These variety of patterns do occur in market action,but I think there is an inclination for traders to try to search for them at the wrong places in market cycles. A basic tenet that I adhere to is that if you need to "search" for it then it is not there. If it is not obvious then don't let your imagination go wild and create the pattern. Likewise, it should develop after an extended or mature price trend. We should avoid designating patterns when trends have just begun and is in the process of developing into a more sustainable trend. When trends begin don't start looking for reversal patterns at it's early stages. If these patterns pop up after let's say an extended up or down move lasting for many periods , days amd months then the reliability factor of it's validity increases. Why? simply stated it is at the right place at the right time.
So, don't spend your time lookng for these patterns to show up at "every" turn or swing in price activity. When it is truly there it will "pop out" and stare at your face.
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