Bullish Chart Patterns Every Trader Should Know
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1. Falling Wedge
A falling wedge forms when the price consolidates between two downward-sloping, converging trendlines. This indicates weakening selling pressure. A breakout above the upper trendline signals a bullish reversal.
- Entry: After breakout confirmation
- Stop Loss: Below the recent swing low
- Target: Height of the wedge projected upward
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2. Symmetrical Triangle
This pattern shows consolidation as buyers and sellers push the price into a tighter range. A breakout above the upper trendline suggests an uptrend continuation.
- Entry: On breakout above resistance
- Stop Loss: Just below the triangle's lower trendline
- Target: Height of the triangle added to the breakout point
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3. Inverse Head & Shoulders
A reversal pattern with three lows - a lower low (head) between two higher lows (shoulders). A breakout above the neckline confirms bullish momentum.
- Entry: Breakout above the neckline
- Stop Loss: Below the right shoulder
- Target: Distance from head to neckline projected upward
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4. Cup and Handle
This pattern forms a rounded bottom (cup) followed by a small pullback (handle). A breakout from the handle signals a bullish move.
- Entry: Breakout above the handle's resistance
- Stop Loss: Below the handle's low
- Target: Depth of the cup added to the breakout level
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5. Ascending Triangle
A bullish continuation pattern with flat resistance and rising support. A breakout above resistance confirms upward momentum.
- Entry: Break above the horizontal resistance
- Stop Loss: Below the rising trendline
- Target: Height of the triangle added to the breakout
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6. Bullish Rectangle
This pattern appears during an uptrend pause, with price moving sideways between parallel support and resistance. A breakout above resistance signals trend continuation.
- Entry: Break above resistance
- Stop Loss: Below support
- Target: Height of the rectangle added to the breakout
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Conclusion
Bullish chart patterns help traders identify potential opportunities by analyzing price action and market psychology. Combining these patterns with volume analysis and confirmation signals can improve trading decisions.
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