In this class, we will discuss chart patterns, which are the 'visual language' of technical analysis in trading. By observing the shapes on price charts, you can find signals for trend continuation and even early warnings of trend reversals!
🧐 What are Chart Patterns?
Chart patterns are specific shapes formed by prices on candlestick charts, reflecting the behavior and psychology of market participants. They are usually divided into two main categories:
Common Trend Patterns:
📖 Chart Patterns and Psychological Struggles
Each chart pattern reflects the psychological struggle of market participants, such as:
Head and Shoulders: The bulls in the market try multiple times to push prices to new highs but ultimately fail, and the bears begin to dominate.
Double Bottom: The bears in the market attempt to lower prices multiple times but fail to break further, indicating that the buying power is starting to strengthen.
Flag: Bulls or bears take a temporary break after a rapid rise, gathering strength for the next round of attack.
Understanding these psychological activities will give you more confidence in judging the market's next moves!
