Section 2 - Chapter 8 - Bar Chart Pattern (Price Pattern)
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The document discusses various price chart patterns used in technical analysis, including reversal patterns like double tops/bottoms, head and shoulders tops/bottoms, and continuation patterns like flags, pennants, symmetrical triangles, and ascending/descending triangles. It provides examples of each pattern, highlighting key aspects like prior trends, volume levels during consolidations and breakouts, and methods for calculating price targets. The purpose is to provide a framework for analyzing bull and bear conflicts and making short or long-term price forecasts.
Section 2 - Chapter 8 - Bar Chart Pattern (Price Pattern)
- 1. Lecture - 17 Price Chart Patterns CMT LEVEL - I
- 2. CMT LEVEL - I Learning Objectives Chart Patterns Basics - Double Top and Bottom - Triple Top and Triple Bottom - Symmetrical Triangle - Ascending & Descending Triangle - Diamond Top & Bottom - Wedge and Climax - Rounding Top, Rounding Bottom - Head-and-Shoulders Top & Bottom - Flag and pennant
- 3. Why we Use Price Patterns? Study of Consolidation & Breakouts Future Forecasting of Price Best Suitable for Turtle & Breakout Trading Strategy Complete Trading Plan High Probability Target Prices Apply to all time frame charts
- 4. Price Pattern •Price patterns provide a framework to analyze the battle ranging between bulls and bears •Price pattern analysis can be used to make short-term or long-term forecasts. •Price pattern have both Continuation & Reversal Patterns
- 5. Categories of Price Patterns Reversal Pattern Continuation Pattern Double Top & Bottom Reversal Flag & Pennants Head & Shoulder Top & Bottom Symmetrical Triangle Falling & Rising Wedge Ascending Triangle Diamond Top & Bottom Descending Triangle
- 6. Support & Resistance Reversal Price Patterns
- 7. Double Top (Reversal Pattern) Prior Trend (Uptrend) First Peak of Current Trend Second peak with low volume Support Break of trough between two peaks Support turned into resistances Price Target of Distance between peak & trough
- 8. Double Bottom (Reversal Pattern) Prior Trend (Downtrend) First Bottom of Current Trend Second Bottom with low volume Resistance Break of peak between two trough Resistance turned into support Price Target of Distance between peak & trough
- 9. Head & Shoulder Top (Reversal Pattern) Prior Trend (Uptrend) Left Shoulder (First Peak of Current Trend) Head (Consecutive peak after left shoulder of current trend) Right Shoulder(Peak is lower than head & equal to left shoulder) Neckline(Connecting two lower point ) Slope of Neckline will affect the degree of aggressiveness price movement Neckline act as support ,if break support become resistance with high volume Price Target of Distance between Neckline to head
- 10. Head & Shoulder Bottom (Reversal Pattern) Prior Trend (Downtrend) Left Shoulder (First trough of Current Trend) Head (Consecutive trough after left shoulder of current trend) Right Shoulder(trough is higher than head & equal to left shoulder) Neckline(Connecting two Higher point ) Slope of Neckline will affect the degree of aggressiveness price movement Neckline act as resistance ,if break Resistance become Support (High Volume) Price Target of Distance between Neckline to head
- 11. Falling Wedge (Reversal Pattern) Prior Trend (Downtrend) Price create a new low with Contraction Contraction is with low volume Volume & Price create negative divergence Resistance Breaks with high volume Price moves between resistance & lower support line
- 12. Rising Wedge (Reversal Pattern) Prior Trend (Uptrend trend) Price create a new High with Contraction Contraction is with low volume Volume & Price create negative divergence Support Breaks with high volume Price moves between Rising resistance & support line
- 13. Diamond Top & Bottom (Reversal Pattern)
- 14. Support & Resistance Continuation Price Patterns
- 15. Bullish Flag & Pennant (Continuation Pattern) Sharp Move due to prior consolidation Break Out with high volume Flag is a consolidation in form of triangle (Pennant) or lower channel Flag is a Consolidation with low volume Price break flag with high volume Price target is equal to the distance of Flag Pole Move is called as Flag Pole
- 16. Bearish Flag & Pennant (Continuation Pattern) Sharp fall in price Break Out with high volume Flag is a consolidation in form of triangle (Pennant) or upper channel Flag is a Consolidation with low volume Price break flag with high volume Price target is equal to the distance of Flag Pole Move is called as Flag Pole
- 17. Symmetrical Triangle (Continuation Pattern) Current Trend is consolidation During consolidation volume are in decreasing trend Break Out is either side (Generally Follow the long term trend) Price break Consolidation with high volume Price target is equal to the open Phase of Triangle Price range is squeeze in support & resistance line
- 18. Ascending & Descending Triangle (Continuation Pattern)