Patterns
Reading recurring patterns in price movements
Key Chart Patterns
Ascending Triangle
A pattern where lows are rising while highs remain horizontal. Generally expects an upward breakout.
Descending Triangle
A pattern where highs are falling while lows remain horizontal. Generally expects a downward breakout.
Head and Shoulders
A reversal pattern with three peaks where the middle is the highest. Indicates the end of an uptrend.
Double Bottom
A pattern that forms two lows and then bounces back. Indicates the end of a downtrend.
Flag
A short consolidation period after a strong trend. Generally continues in the original trend direction.
Wedge
A pattern formed by converging trendlines. Expects upward or downward movement depending on the breakout direction.
Important Considerations for Pattern Analysis
Pattern Completion Confirmation
Rather than entering hastily while a pattern is forming, you should confirm whether the price clearly breaks through the pattern's baseline (resistance or support line) before making a decision.
Volume Confirmation
It is important to check if volume increases when the price breaks through the pattern's baseline. Movements without volume confirmation may have low reliability.
False Signal Prevention
Not all patterns proceed as expected. You must set a stop loss criterion in advance to limit losses.
Time Frame Consideration
Patterns formed on higher time frames (daily, weekly) tend to have higher reliability. It is important to choose a time frame that matches your investment style.