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Chart Pattern Trading Fundamentals

let’s make learning awesome with better collaboration, this course is part of a Series Value Investing 101. Chart pattern trading studies historical price movements on charts to identify patterns that can suggest future price movements. It’s a form of technical …

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Overview

let’s make learning awesome with better collaboration, this course is part of a Series Value Investing 101.

Chart pattern trading studies historical price movements on charts to identify patterns that can suggest future price movements. It’s a form of technical analysis used by traders to make decisions on buying or selling financial instruments like stocks, currencies, and commodities. Here are some fundamentals of chart pattern trading:

1. Types of Chart Patterns

Trend Patterns: Indicate the continuation of an existing trend. Examples include flags, pennants, and wedges.

Reversal Patterns: Suggest a potential reversal of the current trend. Common examples are head and shoulders, double tops and bottoms, and inverse head and shoulders.

Bilateral Patterns: Can signal either a continuation or reversal, depending on the breakout direction. Triangles (symmetrical, ascending, and descending) are typical examples.

2. Support and Resistance Levels

Support: A price level where a downtrend can pause due to a concentration of demand or buying interest.

Resistance: A price level where an uptrend can pause or reverse due to a concentration of supply or selling interest.

3. Volume

Volume plays a crucial role in confirming the strength of a trend or the validity of a chart pattern. An increase in volume during the formation of a pattern or at the breakout point adds credibility to the signal.

4. Breakouts

A breakout occurs when the price moves outside a defined support or resistance level with increased volume. This can indicate the start of a new trend or the continuation of an existing one.

5. Time Frames

Patterns can form over various time frames, from minutes to years. Short-term traders might focus on patterns that form over minutes or hours, while long-term investors might look at patterns forming over weeks, months, or years.

6. Psychology Behind Patterns

Chart patterns represent the collective actions and psychology of market participants. Understanding the psychology behind pattern formation can provide insights into future price movements.

Curriculum

Instructor

In these 6 years of experience, I have completed around 14+ brand representation in founder, executive, leadership, developer, and senior volunteer roles including non-profits. I completed my bachelor's in computing science from Coventry University at PSB Singapore Campus, I completed my diploma in information communication at PSB Academy, I had the opportunity to study Asian and European markets for business development and had the opportunity to diligently develop my soft skills to best and increased my cultural knowledge with in-person communication. Product engineering is one of my core specializations but I am also an expert in Agile and DevOps. These few years I have also delved into blockchain and metaverse.I had the opportunity to practice some Mandarin and Cantonese with my neighbors adding to 32 languages that I practiced at some level. I also am proficient in arts.

Requirements

  • This is the fourth part of seven course Series Value Investing 101

Target audiences

  • Anyone who wants to learn international trade and value investing.
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