Chart patterns are unique formations formed by changes in the price of securities on the price chart. They are the basis of technical analysis.
There are several types of patterns: classic patterns, candlestick patterns and harmonic patterns. As a result, each type has its own specificities. Identify patterns by lines that connect common price points (such as closing prices or high or low points) within a specific time period.
Technical analysts and chart experts seek to identify patterns to predict the future direction of security prices. These patterns can be as simple as a trend line or as complex as a double head and shoulders pattern.
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