FOREX: Cómo negociar patrones de bandera alcista
Hay muchos patrones diferentes que los comerciantes siguen para ayudar a entradas de tiempo y salidas. El patrón de la bandera es uno que tiende a atrapar mi interés cuando lo encuentro porque pueden proporcionar movimientos explosivos. El AUDCAD parece estar en medio de un patrón de bandera de toro potencial. Hoy, veremos cómo identificar oportunidades de negociación de probabilidad más altas fuera del patrón de bandera de toro.
El patrón de la bandera es bastante simple con sólo tres componentes.
En primer lugar identificar un instrumento en una fuerte tendencia hacia arriba (polo de bandera). A través de la duración de esta tendencia alcista, los precios finalmente necesitan descansar y consolidar esas ganancias. Esta consolidación de precios se convierte en el indicador & lsquo; Del patrón. La porción de bandera del patrón tiende a ser un canal de precios inclinado suavemente hacia abajo.
Adicionalmente, esta consolidación retrazará una pequeña porción de la tendencia anterior. Si el retroceso se hace más profundo que el 50%. Puede que no sea un patrón de bandera. Idealmente, veremos que el retroceso es menor al 38%. Como se trata de un patrón de continuación, buscamos que los precios se rompan con una longitud igual al tamaño del pabellón.
(Creado usando los gráficos de Marketscope 2.0 de FXCM)
Durante los últimos 3 meses, los comerciantes han estado comprando el riesgo a través de las materias primas, el mercado de valores. Y las monedas basadas en el riesgo. Como resultado, el dólar australiano ha tenido un buen desempeño frente a la mayoría de las otras monedas, ya que ofrece una tasa de interés más alta de retorno. Así que tenemos una caída de fondo fundamental para la fuerza adicional en el dólar australiano. Hoy, igualaremos el AUD contra el dólar canadiense.
El AUD / CAD no es ajeno al patrón de la bandera. En octubre de 2011, vimos este par formar y completar un patrón de bandera como el dólar australiano empujó más alto en conjunción con el mercado de valores rebotando más alto.
(Creado usando los gráficos de Marketscope 2.0 de FXCM)
Aquí está una imagen del patrón completo. La tendencia alcista anterior (pabellón de bandera) se indica en verde. Los precios se consolidaron en un canal de precios inclinados hacia abajo. Este canal retrocedió sólo el 38% del movimiento ascendente anterior. Para cambiar la bandera, puede programar una entrada en el extremo inferior del canal de precios o esperar una ruptura por encima del canal superior. Mire para tomar beneficios proyectando la longitud del poste de bandera en la parte inferior de la bandera (línea de puntos naranja).
(Creado usando los gráficos de Marketscope 2.0 de FXCM)
Si avanzamos rápido hasta hoy, el AUD / CAD continúa su marcha más alta. Actualmente, los precios se están consolidando lateralmente en un canal inclinado hacia abajo. Por lo tanto, tenemos la oportunidad de entrar en un comercio con al menos un riesgo 1: 2 ratio de recompensa.
Busque una entrada cerca de la parte inferior del canal de precios negro como soporte para ir de largo. Coloque una pérdida de parada justo debajo de la baja oscilación. Así que significa una entrada cerca de 1.0637 con una parada cerca de 1.0590. Una vez que los precios lleguen a la parte superior del canal negro, busque mover la pérdida de parada para romper. Si este patrón se mantiene, la tasa cruzada AUD / CAD podría pasar a 1,10.
--- Escrito por Jeremy Wagner, Instructor de Comercio Líder, DailyFX Education
Para contactar con Jeremy, envíe un correo electrónico a jwagner@dailyfx. com. Sígueme en Twitter en @JWagnerFXTrader.
Para agregar a la lista de distribución de correo electrónico de Jeremy, envíe un correo electrónico con la línea de asunto & ldquo; Lista de distribución & rdquo; A jwagner@dailyfx. com.
DailyFX proporciona noticias forex y análisis técnico sobre las tendencias que influyen en los mercados de divisas globales. Aprenda el comercio de divisas con una cuenta de práctica libre y gráficos comerciales de FXCM.
Análisis de patrones gráficos: banderas y banderines
& # 13; Por Chad Langager y Casey Murphy. Analista senior de ChartAdvisor. com
Los patrones de bandera y banderín son dos patrones de continuación que se asemejan estrechamente entre sí, diferenciándose sólo en su forma durante el período de consolidación del patrón. Esta es la razón por la que los términos bandera y banderín se utilizan a menudo indistintamente. Una bandera es una forma rectangular, mientras que el banderín se parece más a un triángulo.
Estos dos patrones se forman cuando hay un fuerte movimiento de precios seguido por el movimiento de los precios generalmente hacia los lados, que es la bandera o banderín. El patrón está completo cuando hay un rompimiento de precios en la misma dirección del movimiento inicial de precios agudos. El movimiento siguiente verá un movimiento similarmente agudo en la misma dirección que el movimiento agudo anterior. El movimiento completo del patrón de gráfico - desde el primer movimiento agudo hasta el último movimiento brusco - se conoce como el polo de bandera.
Se considera que la bandera o banderín está volando a media asta, ya que la distancia del movimiento del precio inicial se cree que es aproximadamente igual al movimiento del precio del procedimiento. La razón de estos patrones de forma es que después de un movimiento de precios grandes, el mercado se consolida, o pausas, antes de reanudar la tendencia inicial.
La bandera El patrón de la bandera forma lo que parece un rectángulo. El rectángulo está formado por dos líneas de tendencia paralelas que actúan como soporte y resistencia por el precio hasta que el precio estalla. En general, la bandera no será perfectamente plana pero tendrá sus líneas de tendencia inclinadas.
Figura 1: El patrón de bandera
En general, la pendiente de la bandera debe moverse en la dirección opuesta al movimiento inicial de los precios agudos; Así que si el movimiento inicial estaba hacia arriba, la bandera debería estar inclinada hacia abajo.
La señal de compra o venta se forma una vez que el precio se rompe a través del nivel de soporte o resistencia, con la tendencia que continúa en la dirección anterior. Este avance debe ser en un volumen más pesado para mejorar la señal del patrón de gráfico.
El banderín El banderín forma lo que parece un triángulo simétrico. Donde las líneas de tendencia de apoyo y resistencia convergen una hacia la otra. El patrón banderín no necesita seguir las mismas reglas que se encuentran en los triángulos, donde deben probar cada soporte o línea de resistencia varias veces. Además, la dirección del banderín no es tan importante como lo es en la bandera; Sin embargo, el banderín es generalmente plano.
Figura 2: El banderín
Ideas generales Si bien la construcción de la pausa en la tendencia es diferente para la bandera y banderín, los atributos de los patrones de gráfico en sí son similares. Es vital que el movimiento de precios antes de la bandera o banderín sea un movimiento fuerte y agudo.
Típicamente, estos patrones toman menos tiempo para formarse durante las tendencias bajistas que en las tendencias ascendentes. En términos de longitud de patrón, son generalmente patrones a corto plazo que duran de una a tres semanas, pero se pueden formar sobre períodos más largos.
El volumen, como con la mayoría de las señales de ruptura, debe ser visto como fuerte durante la ruptura para confirmar la señal. En caso de ruptura, el objetivo de precio inicial es igual a la distancia del movimiento anterior añadido al punto de ruptura. Por ejemplo, si un movimiento anterior ascendía de $ 30 a $ 40, entonces el objetivo de precio resultante de una ruptura de precio de $ 38 sería $ 48 ($ 38 + $ 10).
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Activos altamente líquidos mantenidos por instituciones financieras para cumplir con obligaciones a corto plazo. Coeficiente de cobertura de Liquidez.
La ventaja competitiva que una empresa tiene sobre otras empresas de la misma industria. Este término fue acuñado por renombrado.
Un crédito fiscal en los Estados Unidos que beneficia a ciertos contribuyentes que tienen bajos ingresos de trabajo en un año fiscal determinado.
Estrategia de comercio Forex Flag Pattern
Las banderas de banderas y las banderas de oso son patrones comunes de cartas que frecuentemente aparecen en todos los pares de divisas y en el calendario. Voy a aprender que mi estrategia favorita sobre cómo el comercio de banderas, tanto en las tendencias de tendencia hacia arriba y hacia abajo. La estrategia es muy fácil de entender y podría ser utilizado tanto por principiantes forex y comerciantes experimentados por igual.
Aparición de banderas en el comercio
Configuración de Forex Trading
Pares de monedas: Cualquier marco de tiempo: Cualquier Indicadores utilizados: 100 Promedio móvil simple (100SMA) Patrones de gráfico: Banderas de toro y banderas de oso
El precio cotiza sobre 100 SMA. El patrón de la bandera de toro aparece en la carta después de una fuerte subida de precios. Espere a que se produzca una ruptura de precio al alza de la bandera de Bull. Entre el comercio largo en el mercado en la apertura de la siguiente barra. Coloque la pérdida de parada 1 pip por debajo de la baja de la línea de tendencia de la bandera Bull inferior. Utilizar 1 a 3 relación riesgo-recompensa para calcular el objetivo comercial.
Arriba es un gráfico de 15 minutos en Nueva Zelanda / Dólar estadounidense (NZD / USD). Identificamos una configuración de patrón de bandera de toro el 4 de noviembre e iniciamos una posición larga después de la ruptura de precio al alza de la bandera de Toro. Nuestra entrada al comercio fue a un precio de 0.7842, junto con una pérdida de stop 1 pip por debajo de la línea de tendencia inferior en 0.7826. Nuestro objetivo de beneficio proyectado fue de 3 x el riesgo tomado a un precio de 0.7890. Aproximadamente 6 horas más tarde, nuestro objetivo de ganancia se logró para 48 pips.
Precio de operaciones por debajo de 100 SMA. El patrón de la bandera del oso aparece en la carta después de una declinación abrupta del precio. Espere a que se produzca un descenso del precio de la bandera del oso. Entrar en el comercio corto en el mercado en la apertura de la siguiente barra. Coloque la pérdida de stop 1 pip por encima de la línea de tendencia de la bandera de Bear. Utilizar 1 a 3 relación riesgo-recompensa para calcular el objetivo comercial.
Trade Ejemplo de la imagen:
Las banderas del oso son patrones de continuación de la carta encontrados dentro de una tendencia bajista. Se forman después de una fuerte caída de precios por dos líneas de tendencia inclinadas paralelas hacia arriba en un ángulo de 35-45 grados. El patrón se confirma en una ruptura hacia abajo de la bandera del oso. El enfoque es muy similar al comercio
Estrategias de Breakout & gt; Sistemas de comercio de divisas
Artículos relacionados
Bandera Ascendente
Estás aquí. Centro de aprendizaje Forex & gt; Nivel MEDIO & gt; Patrones de gráficos
La bandera ascendente es un patrón de continuación. La bandera está formada por dos rectas paralelas hacia arriba que forman un rectángulo. Se orienta en la dirección de la tendencia que consolida. A diferencia de un canal alcista, este patrón es muy corto plazo y marca el hecho de que los vendedores necesitan un descanso.
La creación de una bandera ascendente se produce en una tendencia a la baja. Muy a menudo, esta ruptura se produce a medio camino del movimiento.
El cálculo objetivo se compara con la tendencia anterior. Calculamos la altura de la tendencia descendente general antes de la formación de la bandera ascendente y luego extendemos esa altura en el último punto más alto del patrón.
Aquí está una representación gráfica de un indicador ascendente:
Aquí hay algunas estadísticas sobre la bandera ascendente:
- En el 90% de los casos, el indicador ascendente es un patrón de continuación - En el 62% de los casos, se alcanza el objetivo del patrón - el 76% del indicador ascendente se produce cuando el precio Está en el tercio más bajo de su rango anual - En 10% de los casos, se produce un retroceso en el soporte
- Más el movimiento anterior que precede a la formación de la bandera es poderoso, más el breakout bajista será fuerte.
- El desempeño de una bandera es mucho menos importante cuando se orienta en la dirección de la tendencia
- Una bandera con líneas estrechas es más eficaz que una bandera extendida líneas
- Una bandera es más potente si no hay una ruptura falsa
La estrategia clásica: Entrada: Tome una posición corta en la ruptura de la banda inferior Parada: La parada se sitúa por encima de la última más alta Meta: Objetivo teórico del patrón Ventaja: En caso de ruptura bajista, el movimiento es a menudo potente Desventaja: Objetivo no es a menudo alcanzado (62% de los casos), debe determinar por sí mismo sus propios objetivos.
La estrategia agresiva: Entrada: tomar una posición corta en un punto de contacto con la resistencia de la bandera, a partir del punto de contacto 3 Stop: La parada se coloca por encima de la última máxima que se ha hecho Meta: Objetivo teórico del patrón Ventaja : En el 87% de los casos, la salida es hacia abajo Desventaja: La ruptura hacia abajo aún no está confirmada
Los patrones gráficos están en la base del análisis técnico. Se distinguen en tres categorías: Patrones de reversión - Patrones de continuación - Patrones neutrales. Los patrones gráficos se forman en los gráficos de datos históricos de diferentes pares. Aparecen en todos los plazos.
FOREX significa divisas, lo que significa mercado de divisas. El mercado Forex es donde las monedas se venden, compradas, en forma de paridad. En el mercado Forex, todas las divisas se negocian en tiempo real, 24h / 24h, 7J / 7J. El Forex está abierto desde hace pocos años a los individuos, inversores individuales que deseen diversificar sus inversiones o especuladores puros. El acceso al mercado de divisas para los individuos se ofrece a través de corredores de Forex.
CUIDADO. FOREX es un mercado volátil por el apalancamiento que se ofrece a usted. En consecuencia, siempre existe un riesgo de importantes pérdidas financieras. Tribuforex proporciona a sus internautas algunas ideas y análisis comerciales, pero no será responsable en caso de pérdidas. El objetivo principal de www. forex-tribe. com es ofrecer una herramienta que permite a los comerciantes compartir divisas entre ellos.
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Comercio de la educación de acciones - Tácticas de comercio & amp; ejemplos
Patrón de bandera de toro
La bandera de Bull es un fuerte y fuerte aumento de volumen en un desarrollo fundamental positivo, varios días de lado para bajar la acción de precios en un volumen mucho más débil seguido por un segundo, fuerte aumento a nuevos máximos en volumen fuerte.
El objetivo técnico se obtiene sumando la altura del pabellón al nivel de ruptura eventual en el punto (e).
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Sharp Move: Para ser considerado un patrón de continuación, debe haber evidencia de una tendencia anterior. Debe haber una evidencia de un avance agudo, por lo general en el volumen pesado que puede contener las lagunas. Este movimiento suele representar la primera etapa de un avance significativo y la bandera es simplemente una pausa.
Asta de bandera: El asta de bandera es la distancia desde la primera ruptura de resistencia a la altura de la bandera. El fuerte avance que forma el asta de la bandera debe romper una línea de tendencia o nivel de resistencia. Una línea que se extiende desde esta ruptura a la altura de la bandera forma el asta de la bandera.
Bandera: Una bandera es un patrón de rectángulo pequeño que se inclina contra la tendencia anterior. Si el movimiento anterior estaba arriba, entonces la bandera bajaría. Si el movimiento estaba abajo, entonces la bandera se inclinaría hacia arriba. Debido a que las banderas son generalmente demasiado cortas en la duración de tener realmente altas y bajas de reacción, la acción del precio sólo tiene que ser contenido dentro de dos líneas de tendencia paralelas.
Duración: Las banderas son patrones a corto plazo que pueden durar de 1 a 12 semanas. Hay un cierto debate sobre el marco de tiempo y algunos consideran 8 semanas para empujar los límites para un patrón confiable. Idealmente, estos patrones se formarán entre 1 y 4 semanas. Una vez que una bandera se convierte en más de 12 semanas de edad, se clasificaría como un rectángulo. La confiabilidad de patrones que caen entre 8 y 12 semanas es discutible.
Descanso: Para una bandera alcista, una ruptura por encima de la resistencia indica que el avance anterior se ha reanudado.
Volumen: El volumen debe ser pesado durante el avance o declive que forma el asta de la bandera. El volumen pesado proporciona la legitimidad para el movimiento súbito y agudo que crea el asta de la bandera. Una expansión del volumen en la ruptura de la resistencia presta credibilidad a la validez de la formación y la probabilidad de continuación.
Objetivos: La longitud del asta de la bandera puede aplicarse a la ruptura de resistencia de la bandera para estimar el avance o disminución.
Mercadotecnia Programa de Comercio de Protege - Entrenamiento de Comercio Integral
Mercado Universal de Mercados - Operando con ZERO Subjetividad
Por Todd Granthem
Durante los últimos meses hemos discutido varios tipos de patrones de precios involucrados en el comercio del mercado Forex. Hoy quiero volver a visitar uno llamado el patrón de la bandera y cómo podríamos comercio de divisas con él en el corto plazo ya largo plazo gráficos.
Echa un vistazo a este primer gráfico a continuación, que es el gráfico semanal del EURUSD. Al buscar patrones de precios en estos gráficos a largo plazo, estamos tratando de identificar cuando la tendencia a largo plazo está empezando a retroceder en la dirección de la tendencia. Si sabemos que el precio en el gráfico a largo plazo está empezando a moverse, podemos usar esa información para negociar en los gráficos a corto plazo. En esta tabla hay 3 patrones de bandera bajista semanales que se ven. Si hubiera esperado el precio para salir de la bandera y luego comenzar a cotizar en el corto plazo que habría sido el comercio en el mejor momento.
Una vez que el desglose se produce simplemente se caen a los gráficos diarios o por hora para buscar entradas en el par.
Ahora, eche un vistazo a la siguiente tabla. Este gráfico es el gráfico de 4 horas y ha identificado 4 patrones de bandera alcista que todo pero el último ha estallado. Este último es un ejemplo de lo que se ve como se forma.
Ahora vamos a echar un vistazo más de cerca a esta última formación de bandera posible comprar acercamiento para poder ver los puntos de entrada y salida. Observó que hemos señalado una zona de entrada que se encuentra por encima de la parte superior de la bandera y una flecha de salida que está por debajo de la bandera. Hay varias maneras de colocar las pérdidas de parada, pero la idea principal es colocarla por debajo del punto de ruptura anterior. Algunos pueden preferir una detención más estricta colocándola debajo de la parte superior de la bandera. De cualquier manera estamos saliendo una vez que la fuga ha fallado y el precio está comenzando a moverse detrás a través de la bandera.
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Comercio del patrón de la bandera
Introducción a la negociación del patrón de bandera
En este tutorial final en la serie de comercio de los patrones de la bandera, echamos un vistazo a los principales elementos que componen el patrón de la bandera y también cómo los comerciantes pueden hacer uso de estos elementos con el fin de no sólo entrar en operaciones basadas en las formaciones bandera patrón Sino también ser capaz de gestionar sus oficios mejor. Hasta ahora, hemos aprendido que los patrones de la bandera pueden ser una gran manera de comerciar. Especialmente en torno a un comunicado de prensa, ya que muestra una confluencia perfecta de los fundamentos y el análisis técnico. Los patrones de la bandera vienen básicamente bajo romper estrategias de negociación, donde los oficios se toman cuando el precio sale de una fase de la consolidación. La ventaja agregada de negociar con los patrones de la bandera viene del hecho de que son a menudo patrón de continuación del momento anterior, ya sea alcista o bajista. Por lo tanto, los patrones de la bandera ofrecen un nivel más alto de la confiabilidad que negociando outs.
Elementos de un patrón de bandera
El patrón de la bandera se compone de nada más que los niveles de soporte y resistencia que se forman. La siguiente tabla muestra los niveles clave en un patrón de bandera.
Por lo tanto, los elementos principales del patrón de gráfico pueden ser los siguientes:
El pabellón de alta y baja son por lo general los principales niveles de resistencia y apoyo (o invertido en caso de una bandera alcista).
Cuando el precio rebota de la baja del pabellón (o alto en caso de una bandera alcista), el precio se consolida en un patrón de bandera y generalmente se invierte cerca de lo que se conoce como una resistencia menor (o soporte).
Después de trazar el patrón de la bandera, las operaciones se introducen en la ruptura de la bandera o en reteste hasta el nivel de ruptura
En la mayoría de los casos, los comerciantes tienden a colocar sus topes por encima de la menor resistencia formada en la bandera (o por debajo del soporte menor formado en una bandera alcista) y apuntar la distancia medida desde el nivel de ruptura.
Una falla importante aquí es que las banderas pueden ser invalidadas y esto se ve a menudo basado en cómo el precio reacciona al fondo del poste de bandera (o el alto en caso de una bandera alcista). Las banderas que fallan a menudo tienden a retroceder desde este nivel. En tal escenario, el precio puede o no alcanzar el nivel de precios objetivo de la bandera.
La importancia de los niveles de apoyo / resistencia en la bandera
La comprensión de los principales niveles de apoyo y resistencia, así como los menores niveles de apoyo y resistencia, pueden ayudar a los comerciantes a gestionar sus operaciones. Como se mencionó anteriormente, los comerciantes deben buscar siempre el precio para eliminar los niveles de resistencia o soporte principales, lo que generalmente proporciona buenos consejos sobre si el precio alcanzará el nivel objetivo de la bandera como se pretende.
La siguiente tabla muestra un ejemplo de un patrón de bandera fallido que invalidó la configuración basándose simplemente en cómo el precio reaccionó a los principales niveles de soporte o resistencia.
Aquí, podemos notar que mientras que el precio inicialmente estalló de la bandera alcista que se encontraba la mayoría de los criterios, el precio no pudo romper por encima del nivel de resistencia principal. Para el comerciante astuto, la inversión cerca de este nivel de resistencia principal proporciona pistas tempranas de que el patrón de la bandera podría fallar. Por lo tanto, en lugar de seguir manteniendo el comercio abierto, los comerciantes podrían mover sus operaciones para romper incluso o incluso mirar a bloquear algunos beneficios en previsión de una invalidación del patrón de la bandera.
Verdaderamente, nos damos cuenta de un patrón de candelero harami bajista formado justo cerca de la resistencia mayor que más tarde resultó en el precio bajando más bajo e invalidando la bandera alcista.
Otra forma de asegurarse de que usted está negociando en el lado derecho de la tendencia es tener en cuenta la principal tendencia dominante y sólo los patrones de la bandera de comercio que validar la tendencia principal. Por ejemplo, si la tendencia general es hacia arriba, mira a la negociación sólo la bandera alcista y si la tendencia es hacia abajo, mira a la negociación patrones bandera bajista con el fin de minimizar la tasa de fracaso.
Flag Chart Patterns - En conclusión
Como podemos ver en este artículo, así como los dos artículos anteriores, patrones de la bandera puede ser una buena y simple manera de comerciar con la tendencia, mientras que al mismo tiempo aprovechar las salidas de ruptura. Mientras que las banderas por lo general ofrecen un bajo riesgo de alta recompensa establecer el comercio, la combinación de los elementos de los patrones de la bandera, así como la búsqueda de los patrones de velas pueden ayudar a los comerciantes a mejorar sus tasas de ganancia al mismo tiempo ser capaz de administrar sus operaciones también.
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Bandera descendente
Estás aquí. Centro de aprendizaje Forex & gt; Nivel MEDIO & gt; Patrones de gráficos
La bandera descendente es un patrón de continuación. La bandera está formada por dos rectas paralelas hacia abajo que forman un rectángulo. Se orienta en la dirección de la tendencia que consolida. A diferencia de un canal bajista, este patrón es muy corto plazo y marca el hecho de que los compradores necesitan un descanso.
La creación de una bandera descendente se produce en una tendencia al alza. Muy a menudo, esta ruptura se produce a medio camino del movimiento.
El cálculo objetivo se compara con la tendencia anterior. Calculamos la altura de la tendencia ascendente general antes de la formación de la bandera descendente y luego extendemos esa baja en el último punto más bajo del patrón.
Aquí está una representación gráfica de un indicador descendente:
Aquí hay algunas estadísticas sobre el indicador descendente:
- En el 87% de los casos hay una salida ascendente - En el 90% de los casos, el indicador descendente es un patrón de continuación - En el 62% de los casos, se alcanza el objetivo del patrón - 76% del indicador descendente cuando el precio Está en el tercio más alto de su rango anual - En 10% de los casos, se produce un retroceso en el soporte
- Más el movimiento anterior que precede a la formación de la bandera es poderoso, más la ruptura alcista será fuerte.
- El desempeño de una bandera es mucho menos importante cuando se orienta en la dirección de la tendencia
- Una bandera con líneas estrechas es más eficaz que una bandera extendida líneas
- Una bandera es más potente si no hay una ruptura falsa
La estrategia clásica: Entrada: Tome una posición larga en el breakout de la banda superior Stop: La parada se coloca debajo de la última más baja Objetivo: Objetivo teórico del patrón Ventaja: En caso de ruptura alcista, el movimiento es a menudo potente Desventaja: Objetivo no es a menudo alcanzado (62% de los casos), debe determinar por sí mismo sus propios objetivos.
La estrategia agresiva: Entrada: Tome una posición larga sobre un punto de contacto con el apoyo de la bandera, a partir del punto de contacto 3 Stop: La parada se sitúa por debajo del último más bajo que se ha hecho Meta: Objetivo teórico del patrón Ventaja : En el 87% de los casos, la salida es hacia arriba Desventaja: La ruptura ascendente aún no está confirmada
Los patrones gráficos están en la base del análisis técnico. Se distinguen en tres categorías: Patrones de reversión - Patrones de continuación - Patrones neutrales. Los patrones gráficos se forman en los gráficos de datos históricos de diferentes pares. Aparecen en todos los plazos.
FOREX significa divisas, lo que significa mercado de divisas. El mercado Forex es donde las monedas se venden, compradas, en forma de paridad. En el mercado Forex, todas las divisas se negocian en tiempo real, 24h / 24h, 7J / 7J. El Forex está abierto desde hace pocos años a los individuos, inversores individuales que deseen diversificar sus inversiones o especuladores puros. El acceso al mercado de divisas para los individuos se ofrece a través de corredores de Forex.
CUIDADO. FOREX es un mercado volátil por el apalancamiento que se ofrece a usted. En consecuencia, siempre existe un riesgo de importantes pérdidas financieras. Tribuforex proporciona a sus internautas algunas ideas y análisis comerciales, pero no será responsable en caso de pérdidas. El objetivo principal de www. forex-tribe. com es ofrecer una herramienta que permite a los comerciantes compartir divisas entre ellos.
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La bandera y patrones de banderas
Forex Video Versión de Texto
En nuestra última lección estudiamos estrategias para negociar el patrón de cuña en aumento y el patrón de cuña descendente en el mercado de acciones, futuros y forex. En esta lección vamos a comenzar nuestra serie sobre patrones de continuación con dos patrones gráficos conocidos como Banderas y Banderines.
Típicamente vistos después de un movimiento grande en una dirección en un instrumento financiero particular, las banderas y los banderines representan consolidaciones breves o pausas en el mercado antes de una reanudación de la tendencia en la cual ocurrieron. Los patrones de bandera y banderín contienen un & ldquo; flagpole & rdquo; Que está representada por el movimiento brusco hacia arriba o hacia abajo y, a continuación, la parte de bandera del patrón que se forma cuando hay una consolidación que puede estar rodeada con un rectángulo o una porción de pendiente del patrón que se forma cuando hay una consolidación que puede Estar rodeado por un triángulo simétrico.
Cuando una bandera o banderín se produce en una tendencia alcista, una ruptura de la línea de resistencia superior se puede ver como una reanudación de la tendencia alcista. Por el contrario, cuando una bandera o banderín se produce en una tendencia a la baja una ruptura de la línea de soporte inferior se puede ver como una reanudación de la tendencia a la baja. Patrones de la bandera:
Como se puede ver en el siguiente ejemplo, la porción de bandera del patrón de bandera de toro está rodeada por dos líneas paralelas. Estas líneas pueden ser planas o apuntadas hacia abajo que representan la consolidación en el mercado. El polo se forma entonces por una línea que representa el movimiento grande hacia arriba que establece el toro Bandera. El patrón se ve como el mercado potencialmente sólo tomando un respiro & rdquo; Después de un movimiento grande antes de continuar su movimiento hacia arriba y se refiere así como un patrón alcista.
Ejemplo de una bandera Bull:
La bandera de oso se produce en las tendencias de abajo y es exactamente el mismo patrón que la bandera de toro, simplemente volteado al revés. Las líneas que forman la bandera pueden ser planas o apuntadas hacia arriba, y el polo del patrón es entonces formado por una línea que abarca el movimiento hacia abajo que establece la consolidación de la bandera de oso. El patrón se ve como el mercado potencialmente sólo tomando un respiro & rdquo; Después de un gran movimiento hacia abajo antes de continuar su movimiento hacia abajo y, por lo tanto, se refiere como un patrón bajista.
Ejemplo de una bandera de oso:
Similar a una bandera, un patrón de banderín se forma cuando la consolidación en el mercado se estrecha a medida que madura, requiriendo una forma más triangular para abarcar el movimiento en lugar de una forma cuadrada que forma el patrón de bandera.
Ejemplo de un banderín de buey:
Al igual que con la bandera de toro, la porción de banderín del patrón puede ser apuntado hacia adelante o hacia abajo y el polo se forma por el movimiento hacia arriba que establece la consolidación en forma de banderín. Ejemplo de un banderín del oso:
Al igual que con la Bandera de Oso, la porción de banderín del patrón puede ser dirigida hacia adelante o hacia arriba, y el polo está formado por el movimiento hacia abajo que establece la consolidación en forma de banderín.
Esa es nuestra lección para hoy. Ahora debe tener una buena comprensión de banderas y banderines y la diferencia entre el toro y llevar versiones de cada uno. En nuestra próxima lección vamos a ver estrategias específicas para negociar los patrones de bandera y banderín, con puntos de entrada y salida, así que esperamos verte en esa lección.
Patrones de banderas y banderines
Banderas comerciales y patrones de banderines
Los patrones de cartas de banderas y banderines son conocidos principalmente por señalar una continuación de la tendencia anterior. El patrón de bandera o pennant chart se forma justo después de un movimiento alcista o bajista seguido por un período de consolidación. Aquí es donde el precio tiende a tomar una pausa antes de continuar en la dirección original de la tendencia.
Los patrones de las banderas y las banderas son fáciles de identificar y se pueden encontrar justo después de un comunicado de prensa importante, como los informes de desempleo NFP u otro importante comunicado de prensa económica. (Lea más sobre NFP aquí)
Comercio de patrones de la bandera
El patrón de la bandera es identificado por dos elementos principales.
El pabellón, que es básicamente la fuerte acción de precios
La bandera, que es un período de consolidación
Una bandera alcista es identificada por una bandera inclinada hacia abajo, donde como una bandera bajista es identificada por una bandera inclinada hacia arriba.
La siguiente tabla muestra los patrones de la bandera alcista y bajista junto con la forma en que se negocian.
Figura 1: Ejemplo de bandera alcista
Después de que el precio comienza a consolidarse y moverse gradualmente más bajo, mira para comprar en la salida de la bandera. Se espera que el objetivo de precio sea la distancia mínima anterior del poste de bandera desde el nivel de precio de salida. La Figura 2 muestra un ejemplo de un ejemplo de comercio de bandera alcista.
Figura 2: Ejemplo de comercio alcista de la bandera
La figura 2 muestra un ejemplo de bandera alcista. Observamos cómo el precio se movió rápidamente antes de entrar en un período de agotamiento gradual, que se muestra por el número de velas dentro de la bandera. Después de romper el patrón de la bandera, los precios se reúnen para alcanzar no sólo el objetivo de precio mínimo, sino que se reúne para hacer máximos más altos. Las paradas para la bandera alcista se colocan justo en el bajo antes de la salida de la bandera alcista.
Una bandera bajista se caracteriza por una fuerte caída en el precio seguido de un período de congestión de precios gradual moviéndose más alto dentro de un canal. Al salir de la bandera bajista, el precio viaja a una distancia mínima del poste de bandera. La Figura 3 ilustra un patrón de bandera bajista típico.
Figura 3: Ejemplo de bandera bajista
La siguiente gráfica a continuación, la figura 4 muestra un ejemplo de cómo se negocia la bandera bajista.
Figura 4: Ejemplo de comercio bajista de la bandera
Un punto interesante a tener en cuenta en el ejemplo del ejemplo de la bandera bajista anterior es el reexamen del nivel de ruptura. Este reanálisis puede o no puede suceder, pero sí recuerda a los comerciantes que la negociación de un reevaluar de un nivel de precio de ruptura es siempre una opción segura. Sin embargo, esto no siempre es el caso, como en la mayoría de los casos con banderas, la ruptura que agudo y rápido.
En el caso de la bandera bajista por encima de salir, a pesar del rally de volver a reevaluar el nivel de ruptura, el precio logró alcanzar el objetivo de precio mínimo.
Comercio de patrones de banderines
Los patrones de banderines son similares a banderas, con la diferencia principal de que los patrones se forman como líneas de tendencia convergentes en un triángulo. Los patrones bullent y bearish del gráfico de la bandera funcionan en los mismos principios de los patrones de la bandera. La siguiente tabla muestra un patrón de banderín bajista.
Figura 5: Ejemplo de banderín bajista
Como se ve en el gráfico anterior, el patrón de banderín bajista se identifica por líneas de tendencia convergentes que forman un banderín que está inclinado hacia arriba en el extremo inferior. El patrón es algo similar a un triángulo simétrico formado dentro de un número más pequeño de velas, pero precedido por una gota bajista aguda.
La figura 6 ilustra un ejemplo de pendón bajista. En este ejemplo, también llegamos a ver una falsificación que ocurrió fuera del banderín bajista / triángulo simétrico. Cuando se tomó teniendo en cuenta el patrón de gráfico más grande, el banderín bajista, el fakeout podría haber sido fácilmente evitado. El precio finalmente logra romper menos del patrón banderín eventualmente volver a probar la ruptura antes de caer para alcanzar el objetivo de precio.
Figura 6: Ejemplo de comercio bajista de banderas
El patrón de banderín alcista es el opuesto del patrón de banderín bajista y casi similar a un patrón de bandera alcista, con la excepción de que el banderín está formado por líneas de tendencia convergentes que forman un triángulo simétrico. La siguiente gráfica, la figura 7, muestra un ejemplo de banderín alcista y cómo se puede negociar.
Figura 7: Ejemplo de banderín alcista
La Figura 8 representa un ejemplo comercial de un patrón de banderas alcista. Aquí podemos ver después de un rápido repunte, los precios comenzaron a consolidarse dentro de un rango estrecho formando un banderín. Al salir de este banderín, el precio se recuperó posteriormente para alcanzar el objetivo proyectado.
Figura 8: Ejemplo de comercio de banderines alcista
Las banderas y patrones banderín puede ser una buena manera de patrones de comercio de la carta. Debido a que son patrones de continuación. Las posibilidades de que no un muy bajo y por lo tanto puede ofrecer una manera más segura de los patrones de comercio gráfico, especialmente para aquellos que están recién comenzando con este enfoque de comercio.
Los patrones gráficos son buenas señales de advertencia también. If properly identified, it can help anticipate when the price would continue or when it will reverse. I pay close attention to flags, head and shoulders, and triangles.
Now we will talk about Flags : When the price makes a sudden move up or down, it forms a very steep angle. This angle is almost vertical hence it is called the “flagpole”. Once price has reached the top of its pole, it slants against the trend to form a channel, which is called the “flag”. In an uptrend, the flagpole is upright, and the flag is slanting downwards. When the price surged up, many traders decided to sell causing the price to go down. However, more buyers come in, increasing the price and causing a break out. When price breaks from the superior channel line, the price continues to go up. This is a buy signal. A failure of the flag pattern occurs if the channel is not broken.
The exact opposite is true in a downtrend. The flagpole is inverted, and the flag is slanting upwards. A sell signal occurs when price breaks the inferior channel line. However, not all flags can be clearly seen because they can be much shorter in duration. The important feature of flags is that the price moves within a channel.
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Flag patterns are a reliable continuation pattern that is characterized by two parallel lines (i. e. a channel) that goes against the trend, and is preceded by a large drop or rise which is commonly referred to as a "flag pole".
In the example below we see a strong bearish flag pole, followed by a bullish channel with two parallel lines which make our flag pattern:
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Bull Flag – Bull Flag Pattern
The bull flag pattern is found within an uptrend in a stock. This pattern is named for the resemblance of a flag on a pole. The bull flag is a continuation pattern which only slightly retraces the advance preceding it. The technical buy point is when price penetrates the upper trend line of the flag area, ideally on volume expansion.
Context. Found within an uptrend.
Appearance. The advance has solid volume and the upward price action is strong, which forms the vertical look of a flagpole. The resting period and slight retracement is narrow price action with a slight downward tilt or is horizontal (but no upward movement) with volume contracting during the flag portion of the pattern. The flag portion of the pattern has highs and lows which can be connected by small trend lines which are parallel, giving the flag portion the look of a small channel.
Breakout Expectation. The height of the flagpole may be added to the breakout area at the end of the flag to determine the expected advance. This is why the bull flag pattern is often found in the middle of stock advances.
This stock formed a pair of bull flag patterns during its uptrend. Each bull flag was merely a resting period for this stock as it gathered strength to break out and trend higher.
Members of our stock pick service see us make trades from bull flag patterns all the time, as it’s one of our favorite patterns. Come trade with us!
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Currency Pairs: Anу Timeframe’s. Anу Used Indicators. 100 Simple Moving Mean (100 SMA ) Chart Patterns. Bull Flags аnԁ Bear Flags
Price trades above 100 SMA. Bull flag sample appears οn thе chart аftеr a steep price rally. Wait fοr a upward price breakout οf thе Bull flag. Penetrate long trade аt market οn thе open οf thе following bar. House ѕtοр loss 1 pip below thе low οf thе lower Bull flag trendline. Utilize 1 tο 3 risk-tο-reward ratio tο calculate trade objective.
Above іѕ a 15 min chart οn Nеw Zealand/US Dollar ( NZD/USD ). Wе identified a bull flag sample setup οn November 4th аnԁ initiated a long position аftеr thе upward price breakout οf thе Bull flag. Oυr trade entry wаѕ аt a price οf 0.7842, along wіth a ѕtοр loss 1 pip below thе lower trendline аt 0.7826. Oυr projected profit target wаѕ 3 x thе risk taken аt a price οf 0.7890. Approximately 6 hours later. ουr profit objective wаѕ achieved fοr 48 pips.
Price trades below 100 SMA. Bear flag sample appears οn thе chart аftеr a steep price decline. Wait fοr a downward price breakout οf thе Bear flag. Penetrate small trade аt market οn thе open οf thе following bar. House ѕtοр loss 1 pip above thе high οf thе higher Bear flag trendline. Utilize 1 tο 3 risk-tο-reward ratio tο calculate trade objective.
Trade Example Download & Imagen:
Bear flags аrе continuation chart patterns found within a downtrend. Thеу аrе formed аftеr a steep price decline bу two tight parallel upward sloping trend lines іn a near 35-45 degree angle. Thе sample іѕ confirmed οn a downward breakout οf thе bear flag. Thе аррrοасh іѕ very similar tο trading Bull Flags.
Classification οf Bear Flagstaff. Thе price swing leading tο thе bottom οf thе flag. Thе chart below illustrates.
Bear Flag Forex Trading Thουɡhtѕ
Once a bear flag sample occurs during a downtrend. wе wіƖƖ bе looking tο open a small position іn thе market аѕ bear flags usually indicate thе downside price action soon tο continue.
Trade Entry Wait fοr a sustained brеаk οf thе lower bear flag trend line. Thеn penetrate small аt market οn thе open οf thе next candlestick.
Stοр Loss House ѕtοр loss above thе upper bear flag trend line.
Trade Objective Thе profit objective іѕ аn equal distance οf thе flagstaff A-B whісh іѕ thеn added tο thе top οf thе upper trend channel іn thе bear flag. Though a currency trader сουƖԁ υѕе prior support levels. pivot points. 1 tο 2 risk-tο-reward ratio’s … tο exit thе bear flag trade.
R-T-R Bear Flag Trade Example
Below іѕ a 1 hour chart οn USD/CAD. Wе identified a bear flag sample setup οn Oct 29th аnԁ initiated a small position аftеr thе sustained brеаk tο thе downside. Oυr trade entry wаѕ аt a price οf 1.0212, along wіth a ѕtοр loss аt 1.0244. Oυr projected profit target wаѕ twice thе risk taken аt a price οf 1.0148. Approximately 1 day later. ουr profit objective wаѕ achieved fοr 64 pips.
Foreign Currency Trading
Currency Trading Trend Types - Flag, Pennant and Rectangle Patterns
In this section we teach you how to use certain currency trading patterns to know how to further invest in the market. Reading currency trading charts is perhaps the most important skill for technical analysis, and all it takes is to learn to recognize the right currency trading patterns. In this section we cover three of these trend types - Flags, Pennants and Continuation Rectangles.
Flag Trend Patterns
Flag patterns are continuation patterns that occur quite frequently in currency trading. Flag patterns are seen as a long currency trend. followed by a short turn in the opposite direction, and finally a continuation of the previous direction. Flag patterns are named that because of the flag shape that is created by the currency price regression.
Online Trading Foreign Currency requires trader to be aware of how charts are analyzed, not only in general and through guessing, but by a true recognition of the different trend patterns that the charts are built on. This is what we will describe next.
Pennant Trend Patterns
Pennant patterns are similar to flag patterns, when the difference is that the trend line during the phase of regression is narrowing instead of parallel. They are viewed as a long price move, followed by a regression period with a narrowing price line. This narrowing price line gives the pennant pattern the appearance of a pennant.
Rectangle Trend Patterns
This pattern is seen with a preliminary trend, followed by a horizontal prize move and finally with the continuation of the previous trend.
Posted by Greg Paster
Flag Patterns
A Flag pattern is a chart formation which appears when price action is confined between two parallel trendlines. The Flag may be ascending or descending and is considered to be a continuation signal for the specific market in which it appears.
The two types of flags are those which feature small movements in price action, also known as a “tight” flag, and flags which are wide and feature broad price activity, also known as “loose” flags. Loose flags are generally less stable than tight ones and are not as reliable as a result.
Flag patterns can come in four different varieties, which are the Ascending Flag in a bull market, the Descending Flag in a bull market, the Ascending Flag in a bear market and the Descending Flag in a bear market. The rule of thumb for flags is that the best ones go against the market in which they appear as these tend to signal stronger post-breakout performance.
The psychology behind such behaviour is that the opposing party has momentarily influenced the market, putting the prevailing party on its heels and forcing it to regroup. Regroup it does, however, managing to push prices further in their desired direction after the flag.
As an example, buyers clearly control the market, driving prices ever higher. A descending flag forms, showing bearish strength. While the breakout stands a possibility of trending downward and completely reversing the prior trend, more than likely the buyers are taking a breather before jumping back into the market in full force. When they do, price after the breakout begins to increase again and the bulls sustain the upswing with their renewed momentum.
But what about flags that trend in the same direction as the market in which they appear? These are usually signs that the prevailing side is about to exhaust their momentum rather than renew it. The flag represents a very short period of time in which they have managed to exert only marginal influence on price activity before breaking out and continuing a bigger climb either up or down, depending on their preference. Because they had no chance to regroup due to overwhelming pressure from the opposition during the flag, they are more quickly “maxed out.” As a result, the market continues to trend in the same direction for a short while longer and then reverses or ranges.
For this reason, Ascending Flags in a bull market and Descending Flags in a bear market are weaker than Descending Flags in a bull market and Ascending Flags in a bear market. Short of any significant change in a country’s fundamentals, GDP or economy, a currency pair which experiences a flag in the same direction as the current trend will likely see only nominal gains after the breakout. Positions should be recalibrated to account for an impending change to price activity.
In summary, the characteristics of a Flag pattern are listed below:
Price will be bound between two parallel trendlines.
They may be ascending or descending.
Flags that form against the existing trend perform better than those that form in the same direction as the market.
As a continuation signal, they usually point to a continuation of the current trend.
However, both upward and downward breakouts can occur.
The example below is of the pair AUD/CAD. It manifested a Descending Flag in late March-early April 2011. The market leading up to the Flag was bullish. The Flag went against that direction, and upon breaking out the pair climbed steadily higher over the next few months. This Descending Flag is tight, with price activity restricted to a narrow channel between the two parallel trendlines. This helped performance as evidenced by the prolonged and sustained uptrend that ensued.
Flags and Pennants
Flags and pennants are short-term congestion patterns (one to five weeks) that form in trends. They represent pauses while a trend consolidates and are reliable continuation signals in a strong trend.
A flag is formed when parallel lines can be drawn through the peaks and the troughs in a correction (or a rally during a down-trend). The lines slope counter to the direction of the trend. The pattern is completed by a break outside the parallel lines.
Jack Schwager ( Schwager on Futures - Technical Analysis ) says that he finds flags that slope in the direction of the trend (rather than counter to the trend) just as reliable. There are many traders who would not agree with this.
Ejemplo
ANZ is in the middle of a strong up-trend. Two flags are marked on the chart. Lines through the peaks and the lines through the troughs are parallel and counter to the direction of the trend.
Ejemplo
Telstra Corporation Limited (Australia) in a strong down-trend.
A flag forms with parallel lines counter to the down-trend.
Try to identify the flag or pennant between [2] and [3].
This will give you an idea of how subjective pattern identification can be.
The last pattern is a pennant.
Pennants are really short-term triangles. They form with lower highs and higher lows, over one to five weeks. The line through the peaks and the line through the troughs converge and the pattern is completed by a break outside the converging lines.
Ejemplo
Cellestis Limited (Australia) illustrates a pennant during a recent up-trend. The upper and lower lines converge to form a short-term triangle, completed by price gapping above the upper pennant line.
Volume normally expands at the start of the flag or pennant, contracts as the pattern develops and then expands on the breakout.
In an up-trend, the targeted move is measured from the start point of the trend (the breakout point at the base of the trend or most recent congestion pattern) to the highest high recorded in the flag or pennant pattern. The move is then projected up from the point of breakout (from the flag or pennant pattern), to arrive at the target.
Ejemplo
The All Ordinaries (Australia) exhibited a pennant during a strong up-trend in October 2001.
The targeted move is measured from the high of the lowest day in the "V" bottom.
The upper boundary of the targeted move is the highest high recorded within the pennant. В В В В В В В В В В Move = 3114 - 2885 = 229
The distance from [1] to [2] is then projected from the point of breakout (when price rose above the high of day [3]).
The target is calculated as the move plus the value at the breakout point: В В В В В В В В В В Target = 3088 + 229 = 3317
In a down-trend, the targeted move is measured from the start of the down-trend (the breakout point from the reversal or most recent congestion pattern). The distance is calculated to the lowest low recorded in the flag or pennant pattern and then projected down from the point of breakout (from the flag or pennant pattern).
There are two schools of thought:
(A) The first school will enter a trade at the point of breakout and place a stop-loss one tick outside the opposite trendline.
In an up-trend, the trade is entered on a break above the upper flag or pennant line. The stop is placed just below the lower flag or pennant line, in line (vertically) with the point of breakout.
In a down-trend, the trade is entered on a break below the lower flag or pennant line, with a stop placed one tick above the upper flag or pennant line, opposite the breakout point.
(B) The second school will enter a trade before the breakout point, while the pattern is still forming. Their reasoning is that the patterns are normally reliable and early entry means lower risk, as the stop is closer to the entry point. This is only makes sense for pennants, not for flags where there is no technically reliable point to place a stop-loss.
For pennants, place a stop-loss just outside the trendline, in line (vertically) with the point of entry, on the opposite side to the expected breakout.
Ejemplo
Southcorp Limited (Australia) forms a pennant at the upper end of a trading range and then forms a second pennant after the breakout.
The stock encounters resistance at [1] before making a further trough in September - a promising double bottom .
A pennant forms below the resistance line - a strong bullish signal as the stock has entered a congestion pattern rather than a correction. The breakout at [2] is in the opposite direction to that expected.
Within 4 days the breakout has turned into a bear trap, with a break above the pennant at [3].
A larger pennant forms straddling the resistance line - another strong bullish signal. A long position is entered on day [4], when price respects the bottom trendline.
A stop-loss is placed below the trendline, in line with the previous trough. The stop is indicated by a horizontal trendline at [5]. Price again tests the lower trendline but fails to activate the stop, before making a strong breakout to form a new high.
Volume is not text-book perfect, but expands at the start of the large pennant.
Volume then contracts as the pennant forms.
Finally, volume expands at the breakout.
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How to Trade Bullish Flag Patterns in Forex
By chris | Published: April 3, 2012
Technical traders of all financial instruments like to identify recurring chart patterns that they feel will enhance the probability that they can correctly forecast the direction prices will take in the future. This belief that price patterns on a chart will repeat for any given time frame is what lies at the heart of technical analysis.
Forex traders definitely look for price patterns having such names as 1-2-3 Top or Bottom, Head and Shoulders Top or Bottom, Bear or Bull Flag, Double or Triple Top and Bottom and others that fall into three main classifications as far as whether they indicate whether prices will continue in their current direction, reverse their direction, or form a pattern where they could go either way.
Chart patterns that indicate that prices will maintain their current trend are called continuation patterns. Patterns that forecast a significant change in direction are called reversal patterns and patterns that account for prices to go either way are called bilateral. One of these, the Bullish Flag pattern and how to trade it in forex will be the focus of this discussion. This pattern is classified as a continuation pattern. Here is how to recognize the pattern and how to trade it.
The bullish part of the name simply signifies that currency pair prices are rising. For example a bullish trend in the EUR/USD would mean that the euro is gaining value compared to the dollar. For the pattern to form, the first thing required is a rapid vertical or nearly vertical increase in prices to form the pole of the flag. Ideally, one dramatic, large increase over the period of one bar or candle would form the pole, but in most real-world scenarios it may be permitted to consider three or four bars or candles.
Once the pole has formed, the next price move will be down, but by no more than 1/3 of the distance from the top of the pole to the bottom of the move downward. Prices then reverse back upward, but do not go beyond the top of the bars that form the flag pole. Several or more subsequent price bars can neither rise above the top of the pole nor fall below the first bar that retraced downward to form the first bar of the flag.
Here are some ways to trade this pattern.
1. Since it is classified as a bullish continuation pattern, the assumption is that eventually, prices will break above the top of the flag and then resume their upward trend. The trade can be initiated by placing buy limit orders above the resistance which represents the top of the flag, or entry can wait until resistance is actually broken and a buy market order is placed.
2. A buy limit order can be placed at the support level at the bottom of the flag, or when the bottom of the flag is touched a market buy order can be submitted.
3. A contrarian approach to trading this pattern involves placing sell limit or market orders at the top of the flag, then flipping those orders when prices retrace to the bottom of the flag.
Remember, what constitutes the flag pole and the flag can be a little arbitrary. The pattern is seldom perfect in its resemblance to a flag. Also, this pattern is not very common over short time frames for the major currencies. The USD/JPY will form some nice flag poles, but the flags may go on forming seemingly forever. Contact LucrorFx today for consultation on your Forex investment.
This chart pattern indicator for Metatrader 4 shows flag and pennant patterns for any currency pair on any time frame. Flags and pennant patterns are considered to be continuation patterns. In other words, the price is likely to continue moving in the direction of the primary trend once the currency pair breaks above or below the pennant or flag pattern.
Buy: First, look for an up trend. Then buy when the currency price closes above the flag or pennant pattern.
Sell: First, look for an down trend. Then sell when the currency price closes below the flag or pennant pattern.
Currency pairs: Any
Preferred time frames: Suitable for 1 min charts and higher.
Trading sessions: 1 minute and 5 minute charts. London and US. All trading sessions above the 5 minute time frame.
Opciones de indicadores configurables
Channel period, slope period, pennant pattern factor, flag pattern factor, …
Flag and Pennant Patterns Forex Indicator. 7.5 out of 10 based on 2 ratings
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Bear Flag Forex Chart Pattern
Bear flags are continuation chart patterns found within a downtrend. They are formed after a steep price decline by two tight parallel upward sloping trend lines in a near 35-45 degree angle. The pattern is confirmed on a downward breakout of the bear flag. The approach is very similar to trading Bull Flags.
Definition of Bear Flagpole: The price swing leading to the bottom of the flag. The chart below illustrates.
Bear Flag Forex Trading Ideas
Once a bear flag pattern occurs during a downtrend, we will be looking to open a short position in the market as bear flags usually indicate the downside price action soon to continue.
Trade Entry Wait for a sustained break of the lower bear flag trend line. Then enter short at market on the open of the next candlestick.
Stop Loss Place stop loss above the upper bear flag trend line.
Trade Objective The profit objective is an equal distance of the flagpole A-B which is then added to the top of the upper trend channel in the bear flag. Though a currency trader could use prior support levels, pivot points, 1 to 2 risk-to-reward ratio’s… to exit the bear flag trade.
R-T-R Bear Flag Trade Example
Below is a 1 hour chart on USD/CAD. We identified a bear flag pattern setup on Oct 29th and initiated a short position after the sustained break to the downside. Our trade entry was at a price of 1.0212, along with a stop loss at 1.0244. Our projected profit target was twice the risk taken at a price of 1.0148. Approximately 1 day later, our profit objective was achieved for 64 pips.
pattern flag
flag pattern in the forex market are often but not strange, all describe what is usually a good pattern, but basically nobody detail was not clear working strategy Forex market entry . after was spotted this graphical combination.
propose to consider fairly simple system to enter the market, using this combination - "Flag + ABC".
Very often, it appears after prolonged or sudden movement and is nothing like konsalidatsii area for further continuation of the trend .
For trade I recommend choose forex broker with Metatrader 4
consider the nature of forex strategy "Flag + ABC":
1. Find flick on the chart - pulse and observe how events develop in the future.
2. Ie it must be remembered that after a sharp movement is usually consolidation and now we wait and we .
3. Under this strategy, forex trading, do not need to conclude a deal on the first pullback - have to wait until we see the completion of forming a pattern "Flag".
4. Our task is to wait and see on the chart 3 waves: A, B, C in the pattern of the "flag" (see example below):
5. This combination of graphics, many different names - Volnoviki called her ABC . That's our job to wait for the moment, until it has the latest wave of C and only at the end of wave C will enter the market in the direction of the trend - in a limit order (in this case, Buy Limit).
6. But always keep in mind that only one ABC - that's no reason for the transaction. Since for entry to need to find at least 3-4 trading signal to the input - this can be divergence . rolled under Fibonacci levels (and very good If our point C would be exactly at the level of 38.2 or 61.8% Fibonacci of the previous motion ).
7. In this case, as soon as we have already identified the movement, and presumably we have point A and B - we are over the top (for the downward movement of the contrary) and point B - line and parallel to construct a parallel through A - then we have drawn channel .
8. And only now can on the channel line, carried out through a point A to put a limit order to buy or to sell, respectively, . but do not forget the extra trading signals - for example, or Fibonacci divergence. moving, support and resistance lines, trendline, etc. (See examples at the end of the strategy - which may be extra. Signals).
9. take profit I recommend to put on a low census hai, respectively, or to pull the same safety stop-loss in the positive zone with trailing stop.
10. safety stop-loss - set for next Fibonacci level - for example 50% or 61.8% is desirable - if C falls by 38.2%, etc. - If by 61.8% - 76.4% for the set - then I do not recommend, because on the market may just turn around.
11. Just do not forget that the market is not perfect, and point C tends not to reach or fall below the channel line corrective movement (on the limit order if not successful, then buy at the market price, if already formed a reversal bar).
And do not forget that these combinations occur not always need to be monitored on different time-frames .
Examples of "Flag + ABC" including in the promptness with different indicators, channels, muvinshami, Fibonacci levels:
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The Flag Pattern
Flags can be categorised as a continuation pattern. They represent a brief pause and are seen right after a big move. The price action continues in the same direction after the pause. Research has shown that these patterns are some of the most reliable continuation patterns.
Bullish flags are characterised by lower tops and lower bottoms, with the pattern slanting against the trend. The flag trend lines run parallel.
The Bindal FX strategy tends to look for a confluence of events; in it's trading strategy. In the following trade, for the CHF, there were 6 such confluences of events, which are taught on the home study course. The Flag being just one of them.
Below is an example of a Bull Flag continuation pattern in CHF
The above trade produced nearly 300 pips.
When have many confluences of events, it normally produces massive profits. I often say to the Bindal FX members, don't trade if you don't have to – Have patience, and wait for a signal.
The Golden Rule: No Signal – No Trade!
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Lesson 7: Technical Analysis
7.7 Continuation Patterns
Continuation patterns indicate that the price action described by the pattern is merely a pause in the prevailing trend and that upon breaking out of the pattern the price trend will continue in the same direction. We will look at the following patterns that imply trend reversals: Flags. Rectángulos Triangles, and Wedges. The latter two are presented on the next page.
Of course, patterns do not result in a continuation of the prevailing trend all the time and analytical skill is needed to gauge whether they will come to fruition.
Flags
Flags are a type of short-term pause in the dynamic and progressive movement of a market trend. Flags are usually marked by a sharp, almost horizontal entry into the pattern. Flags are bound by parallel lines of support and resistance. The pattern is commonly followed by a sharp break back into the prevailing trend. Flags have a tendency to form slanted in the direction opposite to the major market trend they inhabit.
On the right, is a flag that interrupts an uptrend. It is short lived, and there is a substantial breakout when price moves above the line of resistance.
Also on the right, is a flag pattern during a downtrend, that plays out in a long timeframe. The consolidation phase lasts two months but does not turn into a new trend. The line of support is broken, ending the flag pattern and continuing the downtrend.
Rectangles
A Rectangle is a period of consolidation within an existing trend where the price moves sideways, fluctuating between two horizontal lines before finally resuming its previous trended course. Such a pattern is not very significant to the trend’s future course – a rectangle seldom accelerates the prevailing trend beyond its previous slope. Though not characteristic in determining any anomalous effects in the presiding trend, a rectangle pattern presents an opportunity to trade within, as one can open alternating positions as the price repeatedly bounces from support to resistance and back.
A theoretical sketch of a rectangle in a downtrend and an uptrend is shown on the right.
A real world example is presented below. An uptrend that was started in September enters a period of consolidation in October. Price forms a rectangle pattern before the uptrend continues. You can see a flag pattern emerge a couple of months later as well.
¡Bienvenido! Dear Traders, you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down, have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in the forex trading. If you are determined, serious, and hard working, you can surely be included in the group of winners.
TRADING FOREX WITH BEARISH FLAG CHART PATTERN
Two upward sloping parallel lines form the bearish flag chart pattern. Upward sloping top of the flag pattern holds the resistance levels and the upward sloping bottom holds the support levels. We can see in bearish flag pattern both support and resistance levels go higher and higher.
Reliability of the bearish chart pattern depends on the behavior of the volume changes along the pattern formation. Generally, the volume tends to decrease along the pattern formation. At the breakout point, the volume must spike in order to ensure the effective break out.
The profit target for an order placed with the bearish flag pattern should be the length of flagpole. The stop loss of the order can be placed on the resistance levels just before the breakout point. A bearish flag pattern gives signal of trend continuation.
Absence of volume spike during pattern break out is an indication of pattern failure.
Trading the Flag patterns the right way
In the realm of the many different types of chart patterns, the flag patterns presumably fall into the category of one of the most safest chart patterns to trade. The reasoning behind this statement comes from the very definition of flags ( and pennants ).
Definition of the Flag Pattern
A flag (Bullish or Bearish) is indicative of a continuation of the prevailing ( underlying or the main ) trend. When a flag pattern is identified on the chart, it usually points to a pause in a rally creating a tight range type of price action. This pause usually results in a break out as price tends to resume its previous trend.
Unlike other chart patterns such as the famous Head & Shoulders. which generally points to a reversal of trend ( or in some cases as a continuation pattern ), it is relatively difficult to trade the H&S pattern compared to the flag pattern.
Therefore, trading flags gives the trader the all important trend direction and thus reduces the risks of the trade reversing. Despite the simplicity of flags, they are very deceptive when trading in real time. While there are many resources available on the Internet that talk about flags, in this article we look at flags under a microscope as well as outline a few rules that offers a good high probability trade usually with a good risk to reward ratio.
While pennants too are continuation patterns, in this article we focus just on flags as they are easy to identify.
Identifying a Flag Pattern on the chart
Flags, are formed both during an uptrend and during a downtrend. The following rules must be met in order for a chart pattern to qualify as a flag.
Price usually makes a sharp move. This can be identified with wide bodied candlesticks ( or wide bars ) or even lines on a line chart. In this move, there are usually no retracement or if there are, the retracements are very small in comparison
After a sharp move, price starts to consolidate within a range. During this phase, markets are usually slow and price also tends to slowly align to the opposite direction of the previous move
After price consolidates for a certain period of time, we can identify the pattern as a flag when the previous move was a sharp rally followed by the consolidation phase where price trades within a range and usually forms a slope.
Note: If the slope is too steep, it does not qualify as a strong flag pattern
Qualifying a flag pattern in the chart
Most literature on the Internet usually plot flags as price making a zig-zag pattern making alternative contact points. This does not have to be the case. Price can make as many contacts within the flag and they do not have to be in a zig-zag fashion.
The chart below shows a flag pattern with general rules.
Strong Flag Patterns – Ideal Set up
The following rules describe an ‘ideal’ flag pattern to trade. For simplicity the description below is for a bullish flag. The opposite is true for a bearish flag.
Price makes a sharp rally with little to small retracements in between
Price starts to consolidate and makes minor lower highs and over a period a flag pattern forms with a slope
Using the equidistant tool in your charting platform, draw a channel for the flag
Measure the distance of the previous rally in pips
Using the Fibonacci tool. connect the previous rally top and bottom (connect using closing prices and not the highs and lows) and note the 38.2, 50 and 61.8 fib levels
The Set up
Price should retrace to 38.2% of the previous rally (although 50% and even 61.8% are also valid). In such cases, price usually breaks the lower end of the channel. This is even more validated when only the lows touch the 50% or 61.8% levels but not a concrete rule
Once price gets back into the channel, wait for a break out. Price must travel a reasonable yet small distance (and usually have a couple of candles opening and closing outside of the channel break out)
Note the price level of break out and add the distance calculated from the previous rally prior to this consolidation. This gives you the target
Set a pending buy order at the break out price with stops at the low prior to the break out with the calculated target
During the scope of the expected travel, price continues to make minor retracements. To further extend the profitability of the flag patterns, add to positions at the high prior to the retracements with stops set to to the first trade’s entry
The positions that you build with the flag pattern can be managed by trailing the stops of the original entry to key retracement levels. Stops should be trailed such that the first trade’s new stop level covers the risk of the added position. This way, even if price drops back and you get stopped out, the risk is evened out.
Flag Pattern (Bullish) – Ejemplo de Comercio
Flag Patterns – Other important points
In the context of the forex markets, the 4 hour time frame offers the best flag pattern set ups. Although flags are formed across different time frames, the 4 hour chart is ideal as it is reasonably balanced even during new releases. Always check the daily charts or weekly if need be to ascertain the prevailing trend and only trade flags that are within the larger trend. In other words, no matter how tempting a set up might look like, always stay with the trend. Line charts are ideal for plotting and identifying flags as the wicks from candlesticks can be distracting and thus hide the pattern some times.
Although flag patterns might come across as discretionary trading, when sticking to the above rules, a trade should be able to trade the flag patterns when they meet the criteria. Another advantage of the flag pattern from 4-hour charts is that because of the consolidation phase, traders can also set alerts at the three Fibonacci levels so they don’t have to spend time staring at the charts.
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When talking about flag patterns, it probably will remind many traders of wedges and triangles, actually there’s no difference among them – they are short-term continuation patterns. For convenience, we’ll call all these patterns as flag in the rest of the article. Flag is a sharp, strong rise/fall trend with several bars of sideways price action on much weaker trade followed by a second, sharp move to new highs/lows.
Flags, wedges and triangles can be categorized as continuation patterns. They usually represent only brief pauses in a currency pair. They are typically seen right after a big, quick move. The price then usually takes off again in the same direction. Research has shown that these patterns are some of the most reliable continuation patterns.
Flag Patterns in GBPUSD daily chart
Flags are short-term patterns that can last from 1 to 12 bars. There is some debate on the timeframe and some consider 8 bars to be pushing the limits for a reliable pattern. Ideally, these patterns will form between 1 and 4 bars. Once a flag becomes more than 12 bars or more, it would be classified as a rectangle.
A flag is a small rectangle pattern that slopes against the previous trend. For a bullish flag pattern, the flag would slope down; a break above resistance indicates that the previous advance is resumed. For a bearish flag pattern, the flag would slope up, a break below support indicates that the previous decline is resumed.
The biggest difference between flags and other patterns is that, flags (wedge or triangle) are usually too short in duration to have any real impact on highs and lows of the price. The price actions are confined within two parallel trend lines, while other patterns are not.
The following indications are important when identifying flags.
Flag patterns occur when a market makes a very strong up /down trend in prices, followed by a pause or sideways trading for a few price bars; if the distance of the flagpole is limited, flag will be less typical.
Do pay special attention to the slope of flags: if the slop is consistent with the trend, it’s highly possible that it is not a continuation patterns, but an exhaustion of current trend, full of risk of reversion.
The duration of flag. If the duration is longer than others in current trend, the trend is very near to the end; discretion is advised.
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Bearish Flag Pattern in Technical Analysis
Bearish Flag Pattern in Forex Trading
Bearish Flag Pattern is a bearish continuation pattern. It usually consists of two parallel trend lines forming a horizontal or slightly upward, rectangular flag shape. This shape is following by a nearly vertical price decline. The sharp decline before the forex pattern is referred to as a Mast. Whereas the flag shape is the result of a consolidation phase during a down-trend.
Characteristics of the Bearish Flag Pattern
Trend Lines: Two trend lines run parallel to each other, unlike the pennant’s converging trend lines. these trend lines form a flag shape. A dip below the lower line indicates the resumption of the down-trend.
Volume: The volume usually decreases as the formation develops. However, volume increases sharply at the end of the formation.
Duration of the Bearish Flag Pattern: The pattern typically lasts for 5 to 30 days.
Possibility of Price Reversal – The price may break the initial down-trend in some rare cases. It’s usually indicated by an increasing volume. The trend may reverse its direction.
Duration of the Pattern – If the price oscillates a lot at the beginning, the pattern lasts longer.
Target Price: The length of the mast indicates the potential target price.
Criteria that Supports – Volume.
Volume should decrease considerably as the Bearish Flag pattern develops. It must increase sharply on the day of pattern confirmation.
Criteria that Refutes – Duration of the Pattern. No Volume Spike on Breakout and Long Inbound Trend.
The Bearish Flag pattern should not last more than 30 days. If it does, the down-trend becomes unpredictable.
If you don’t notice a volume spike on the pattern confirmation day, the pattern itself becomes unreliable.
If the flag formation is way too small compared to the mast, the down-trend is supposed to be exhausted.
The Bearish Flag pattern is just a break during a down-trend. Where the price has moved ahead of itself, and waits for the bearish momentum to gain volume. That, before resuming the down-trend once again.
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Types of Flag Patterns and how to draw flags correctly
Introduction to Types of Flag Patterns and how to draw flags correctly In the previous Tutorial. we discussed the benefits of combining technical and fundamental analysis for short term trading by using the flag chart patterns. In this tutorial, we'll delve a bit deeper into identifying the different type of flag patterns that are formed as well as provide insights into how to draw flag chart pa.
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One comment on “Types of Flag Patterns and how to draw flags correctly”
[…] but also be able to manage their trades better. So far, we have learned that flag patterns can be a great way to trade, especially around a news release as it shows a perfect confluence of both fundamentals and […]
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Lee mas:
A flag is a continuation pattern. and represents a period when the price action pauses in the midst of a strong trend. A flag occurs typically after a particularly strong market move, and represents a period of retracement as traders who caught the initial move take profit. Once traders are satisfied that the price of the asset has retreated to a “cheaper” level and that there is potential for a renewed round of movement in the initial trend, they will re-enter, sending the asset price back in the direction of the initial trend. If you can picture the way a flag of a country looks on a mast, then you can recognize flag patterns.
There are two types of flag patterns:
Bullish flag patterns, which occur in the middle of an uptrend as a period of mild downward retracement.
Bearish flag patterns, which occur in the middle of a downtrend as a period of mild upward retracement.
The two flag patterns are shown below:
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This example shows a bullish Pennant pattern. A long position is opened. The profit target (green line) is reached and the position is closed with a profit.
The Flag pattern strategy is a day trading strategy. The strategy focuses on short, sharp price break-outs. This focus makes it useful for the forex markets. Signals are rare. About two or three signals per instrument per week is the norm. Traders using this pattern should work with multiple instruments. Although this strategy is explained here on the basis of 10-minute charts, swing traders can easily put their charts on 1-day and also use the pattern. In this case it is probably advised to use the Scripts functionality in the platform to detect the signals every morning.
In NanoTrader Full follow these steps:
Choose the instrument you wish to trade.
Open a chart with the template study "WHS Flag".
Semi-automated trading? Simply activate the TradeGuard+AutoOrder or the AutoOrder function.
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Continuation Chart Patterns
When these continuation chart patterns are formed they confirm that the current Forex trend is going to continue moving in the same direction.
These patterns are used by currency traders to identify halfway points of the trend, this is because they form at the halfway point of a trend.
There are four types:
Ascending triangle
Triángulo descendente
Bull flag/pennant
Bear flag/pennant
Ascending Triangle
The ascending triangle is formed in an uptrend and it shows that the upward direction of the market is going to continue.
It shows that there is a resistance level that the buyers keep pushing each time moving it higher, and once it breaks price will continue moving upward.
The overhead resistance temporarily prevents the Currency market from advancing higher, while the rising trend line beneath the pattern signals that buyers are still present. An upside penetration of the upper line is a technical buy signal for a market breaking out from an ascending triangle.
Found within a Forex uptrend, the ascending triangle forms as a consolidation period within the uptrend and indicates upside continuation will follow.
The market formed an ascending triangle during its uptrend which led to upside continuation. The buy point is when price clears the upper sloping line and the market continues moving upwards.
Descending Triangle
The descending triangle is formed in a downtrend and it shows that the downward direction of price movement is going to continue.
It shows that there is a support level that the sellers keep pushing each time moving it lower, and once it breaks price will continue moving downwards.
The support temporarily prevents the market from declining, while the descending sloping line above the pattern signals that sellers are still present. A downside penetration of the lower line is a technical sell signal for a market breaking down from a descending triangle, and indicates selling will follow.
Found within a Forex downtrend, the descending triangle forms as a consolidation period within the downtrend and indicates downside continuation will follow.
The market formed a descending triangle during its downtrend which led to further selling and continuation of the downtrend. The technical sell signal is when price breaks the lower horizontal sloping line as selling resumes to push the market lower.
Toma de 4 a 6 semanas para abrir una cuenta, abrir temprano o vía rápida: Lea el artículo "Procedimiento de apertura de cuenta"
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Bull Flag/Pennant
This pattern forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support and resistance for the price until the price breaks out. In general, the flag will not be perfectly flat but it will be sloping.
The bull flag is found within a Forex uptrend. In this continuation pattern where the market retraces slightly, it is therefore a slight retracement with narrow price action that has a slight downward tilt. The technical buy point is when price penetrates the upper line of the flag. The flag portion has highs and lows which can be connected by small lines which are parallel, giving it the look of a small channel.
The pennant occurs at halfway point of a bullish upward trend and after a breakout a similar move equal to the height of the flagpole is expected.
The bull pennant above was just a resting period as the market gathered strength to break out and move higher. The continuation signal was confirmed as the upper line was broken to the upside.
Bear Flag/Pennant
This flag is found in a Forex downtrend. The bear flag is a continuation pattern where the price retraces slightly with a narrow price action that has a slight upward tilt. The technical sell point is when price penetrates the lower line of the inverted flag. The pennant portion has highs and lows which can be connected by small lines which are parallel, giving it the look of a small channel.
The bear pennant above was just a resting period for the market prior to more selling. The continuation signal was confirmed as the lower line was broken to the downside.
Toma de 4 a 6 semanas para abrir una cuenta, abrir temprano o vía rápida: Lea el artículo "Procedimiento de apertura de cuenta"
Únete a 500.000 Comerciantes, Comercio con un Agente Regulado Europeo con Spreads tan bajo como cero: Lea el artículo "Regulated Broker"
Originally posted by connecting4less View Post
as i was surfing the web, i found this great concept about Hikkake pattern,
the pattern works like this, it consist of 2 bars on hourly daily or weekly the bar the forms called inside bar, and it has to have higher low and lower high than the preceeding bar. Then the second bar in the pattern must have a higher high and higher low than the previous "inside" bar to form a bearish signal, and you would take the entry when it breaks the low of the inside bar on the 3rd bar, and the opposite for a long entry
What i would like if someone can make an alert to attach to the chart so when the inside bar forms to give a sound alert? and one will be helpful to do that? and here is the link for the rules and how the pattern works
Last edited by shmorca ; 30-07-2007, 14:26.
Originally posted by connecting4less View Post
as i was surfing the web, i found this great concept about Hikkake pattern,
the pattern works like this, it consist of 2 bars on hourly daily or weekly the bar the forms called inside bar, and it has to have higher low and lower high than the preceeding bar. Then the second bar in the pattern must have a higher high and higher low than the previous "inside" bar to form a bearish signal, and you would take the entry when it breaks the low of the inside bar on the 3rd bar, and the opposite for a long entry
What i would like if someone can make an alert to attach to the chart so when the inside bar forms to give a sound alert? and one will be helpful to do that? and here is the link for the rules and how the pattern works
Which forex pair have you found this system useful?
Good evening Traders,
Thank you for this work, however I attach the indicator in the chart and I do not see nothing . Can you inform us on this subject ?
Hi BrunoFX, The indicator doesn't paint the past, so the only signals you'll see will be the ones that actually occur as the session goes on. I'm sure there's a way to also add historical signals to the indicator, but I didn't deem it necessary to include in the code.
Comentario
Here's a screenshot of the past few hours of output from the indicator. Due to my other development on MT4, some morning signals are not on the charts.
Both on AUDUSD and USDJPY, there are two green lines. The first on AUD belongs to the 60 minute Hikkake and the same is true of the second on JPY.
As you can see, the yen is performing pretty poorly under this indicator, and AUDUSD has three good signals. The euro is doing as well as the yen, although it does appear we are in a ranging market.
Last edited by modulatum ; 31-07-2007, 04:37.
Comentario
Can you please share the indicator that`s at the bottom of your charts.
Comentario
Can you please share the indicator that`s at the bottom of your charts.
Por supuesto. It's Trend Continuation.
Comentario
Hi BrunoFX, The indicator doesn't paint the past, so the only signals you'll see will be the ones that actually occur as the session goes on. I'm sure there's a way to also add historical signals to the indicator, but I didn't deem it necessary to include in the code.
I do not visualize the indicator after attachment why?
Comentario
Thank you Modulatum, but I would like the other one too (the sniper)
Comentario
I do not visualize the indicator after attachment why?
If you don't get a signal after an hour or so, I'm not sure. The indicator is not designed to show you the past values, so you can't backtest it, only forward test it.
Originally posted by PartyPips
Thank you Modulatum, but I would like the other one too (the sniper)
Ah, I'm afraid I can't do that. I bought the indicator and, besides, it wouldn't work for you: it's meant for one account number only.
Forex Swing Trading Strategy #8:(Bullish Pennant Trading Strategy)
The bullish pennant trading strategy is a strategy where you use one of the common forex chart patterns called the bullish pennant to enter into a long trade (buy trade).
Do not get confused with bullish pennant forex chart pattern with the bull flag forex chart pattern formation, they are different but have one thing in common-they are both bullish continuation forex chart patterns.
Also do not get confused with the bearish pennant forex chart pattern with the bear flag forex chart pattern as they are different as well but have one thing in common: they are both bearish continuation forex chart patterns .
The bullish pennant trading strategy is a pure 100% price action trading strategy. You don’t need any forex indicator at all but you just need to develop the ability to spot this pattern as it is forming on your forex charts so you can trade it.
WHAT IS THE DIFFERENCE BETWEEN A FLAG FOREX CHART PATTERN AND A PENNANT FOREX CHART PATTERN?
The only difference between a pennant chart pattern and a flag pattern is that is that a flag pattern looks more rectangular shape where as a pennant looks like a triangle.
THE PENNANT CHART PATTERN
The pennant chart pattern is a common chart pattern used in forex technical analysis and it is formed when you draw two converging trendlines (see above chart).
For a bullish pennant chart pattern to form, there has to be an existing uptrend.
For a bearish pennant chart pattern to form, there has to be an existing downtrend.
the formation of a bullish pennant pattern shows a period of market consolidation
a breakout of this bullish pennant chart formation should breakout to the upside continuing the original uptrend.
so the bullish pennant chart pattern is a bullish continuation pattern.
HOW TO TRADE THE BULLISH PENNANT-THE TRADING RULES
Timeframes to trade: 1hr, 4hr and daily timeframes are the best timeframes to trade this chart pattern (they are more reliable)
When an uptrend has started, you wait for the bullish pennant formation to form.
You do this by drawing two converging trendlines and wait for price to breakout of the downward trendline to the upside.
Once price breaks out to the upside, makes sure the candlestick must close outside of the downward trendline.
Place a buy stop order 3-5 pips above the high of that candlestick that has just closed.
For stop loss, place it 5-10 pips below the low of that candlestick.
Set your take profit at 3 times what your risked or use a previous swing high point and set the price level of that as your take profit target level.
How to manage your trade: as price continues to move upward, lock in your profits by moving stop loss and trailing it behind “bottoms” that form as price continues to move up.
Chart pattern recognition software
Chart Patterns is a popular analysis tool in forex traders. Forex chart pattern is part of the technical analysis and forex chart pattern can help you to see more clearly the Forex market and to predict price movements. Chart patterns are as old as the technical analysis indicators. There is free automated pattern recognition indicator software that recognizes over 170 patterns, including chart patterns and candlesticks patterns, Generally this recognition software can distinguish chart Continuation Patterns (continuing the trend) and Reversal chart Patterns (a change of the trend is expected). However, there are patterns that can be both simultaneously. The following list presents the most popular patterns:
Double Top (Reversal) Double Bottom (Reversal) Head and Shoulders Top (Reversal) Head and Shoulders Bottom (Reversal) Falling Wedge (Reversal) Rising Wedge (Reversal) Rounding Bottom (Reversal) Triple Top (Reversal) Triple Bottom (Reversal) Bump and Run Reversal (Reversal) Flag, Pennant (Continuation) Symmetrical Triangle (Continuation) Ascending Triangle (Continuation) Descending Triangle (Continuation) Rectangle (Continuation) Price Channel (Continuation)
And there is a software application to automatically scans markets for chart patterns and displays them. Many of the patterns I present in separate articles, you can see a few important patterns that were easy to see. One of the popular pattern is the Ascending Triangle, or rising triangle chart pattern. In this case the price of the triangle is broken up, then came back and respected the old resistance level as support, then to climb too high up.
Title Post: Chart pattern recognition software Rating: 100% based on 99998 ratings. 5 opiniones de los usuarios. Autor: Herman Sucipto
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Tag: flag chart patterns
Chart Patterns by Bruce Kamich can be a well crafted, modified, as well as structured guide on the topic near to sophisticated traders as well as energetic investors. The writer targets the main graph designs which, getting was the actual check of your time, predominate, as well as in whose evaluation could be satisfying. It’s not a good encyclopedia associated with graph designs.
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PRO Announcement - PRO and parts of PipHut will be down for maintenance this weekend as we will be adding several new features to PRO including S/R charts, email notifications, pullback backtesting, strategy backtesting, etc etc. These feature will be live for current users right away - we welcome your input for further enhancement and any suggestions you have. We use the PRO tools for our own trading and we recognize that each trader has their own different style - it is our goal to make PRO the essential tool for every forex trader. An email will be sent out with further information to PRO users.
Daily Outlook: It is Friday and we won't *probably* won't be trading, as usual, but we there is a nice flag pattern on the charts right now and if a break appears early enough in the day to avoid the weekend exodus then we will take it. Beware that the first break in these patterns is a false break about 50% of the time and we will close and reverse our position if the break is not sustained.
Trading Idea: It's a bullish flag but we will trade in either direction (long on break above falling trend resistance and short on a break below rising trend support. As mentioned above we will close and reverse if the break is not sustained and for either direction we will target 20/20/25/30 pips for 95 pips profit.
Have a great weekend everyone!
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still long from 3455 tp 3535 ordre sell 3555 tp 3440
Luxma
Hi everyone, nice Euro game these days, however Rising wedge on 15 TF has support @3490 and looking to break this support then 3460 will be next target and down there will look for the start point of this pattern @3424 but it is right now very weak pattern and Resistance @ 3521 has to hold for more downside if not then the Triangle 60 TF will take over @3585 and will push this to 3682 final destination, GL and Take care
corrió
thank you luxma, always a pleasure to have your input
am on the side line today missed the train going south
3416 last level before big drop, then back up for bigger rally imo
HARRY
Hello everyone My feeling is that long trades are a bit fraught with danger seeing as price tried to break through major downtrend resistance 3 times without success. One feels that a downturn is close but when will have to watch 4hr/daily chart. Outcome of talks today on Euro’s future are of course going to have a major bearing on direction.
wil short if 3360 do not hold and another short if 3560 will not show higher
in au will take profit in 0291 (second lot will move sl to a green area(0250) to try to bbke up area
Technical Analysis Articles | Written by Jay Lakhani |
The Flag Pattern
Flags can be categorised as a continuation pattern. They represent a brief pause and are seen right after a big move. The price action continues in the same direction after the pause. Research has shown that these patterns are some of the most reliable continuation patterns.
Bullish flags are characterised by lower tops and lower bottoms, with the pattern slanting against the trend. The flag trend lines run parallel.
The Bindal FX strategy tends to look for a confluence of events; in it's trading strategy. In the following trade, for the CHF, there were 6 such confluences of events, which are taught on the home study course. The Flag being just one of them.
Below is an example of a Bull Flag continuation pattern in CHF
The above trade produced nearly 300 pips.
When have many confluences of events, it normally produces massive profits. I often say to the Bindal FX members, don't trade if you don't have to – Have patience, and wait for a signal.
The Golden Rule: No Signal – No Trade!
We have already spoken about flags and pennants formations in the article “Flags and Pennants Price Pattern ” our “Forex Trading Guide ” so we briefly summarize what these patterns are and quickly move on to the trading strategy.
Flags and pennants are both predominantly continuation patterns which start with a sharp initial move (we will call it a flagpole), followed by a consolidation period. The price then usually breaks out in the direction of the flagpole, thus rendering them continuation formations. As it was pictured in the article “Flags and Pennants Price Pattern “, the main difference between the two is that the pennants’ consolidation period resembles a triangle (the two boundaries are sloping toward each other and will eventually converge), while the flags consist of two concurrent lines which together slope away from the flagpole.
Pennant pattern
Let us dig into the specifics of the pennant pattern. As we said, it is made up of two elements – an almost vertical climactic bar (the flagpole), followed by a zone of sideways trading – the consolidation area (most often a symmetrical triangle).
Before entering a trade based on this formation, you of course need to have a predetermined entry point, stop-loss and profit target. The first step is to measure the height of the flagpole. After the price has entered the consolidation area (which allows for the measurement of the flagpole), we set our entry point at 10% of its height above its highest point. This should help filter out any false breakouts from the formation.
Our stop-loss should be 25% of the flagpole’s height and is placed below the entry point, thus 15% below the flagpole’s high. This will protect you from an eventual failure of the pattern’s continuation nature.
As for the profit target, we will be using a scale out strategy. Our first profit target is the amount risked, i. e. 25% of the flagpole’s height. As soon as it is reached, we take out half of our position and we will move our stop up to the entry point. This leaves us with a profit of 25% of the flagpole’s height on the first portion of the trade, while the remainder may drop to breakeven in the worst case scenario.
The profit target for the remainder of our position will be equal to the length of the flagpole, starting from its top (page 176), i. e. 90% of the flagpole’s length up from the entry point (the 10% difference comes from the entry point being 10% of the flagpole’s height above its high).
Ejemplo
For the screenshot above we have used an hourly chart of the GBP/USD cross. The market broke out of an established trading range at (1) and formed a flagpole (bar 2).
Once the price action later entered a consolidation area and it started resembling a flag/pennant formation, we begin to calculate the pattern’s elements in order to position ourselves accordingly.
The flagpole’s high is at 1.7098 US dollars and its height is 48 pips. Thus, we enter at 10% above its height (or 5 pips), at 1.7103, as marked by the purple horizontal line. Our stop is placed 25% of the pole’s height below the entry (or 15% beneath its high – 7.2 pips), at 1.7091 – visualized by the red horizontal line.
Our final profit target is 100% the flagpole’s height extended above its high (or 90% above the entry point), thus at 1.7146 US dollars, marked by the green horizontal line.
However, we said we will be scaling out from the trade, as soon as we profit the amount risked. This means that when the price rises by 25% of the flagpole’s height, projected from the entry point, we will exit half of our position and move our stop to breakeven. The initial profit target was reached at 12 pips above the entry level, or at 1.7103 + 0.0012 = 1.7115 US dollars, visualized by the black horizontal line. It was hit at bar 3 . We then exited half of our position and moved our stop-loss to breakeven, before our final profit target was reached shortly after.
Flag pattern
Like pennants, flags also begin with a very strong initial move, followed by a consolidation area. The climactic bar which forms reflects the bulls’ dedication to buy, disregarding the price they are paying – they just want to be on the market at all costs. Such a move is often triggered by a major economic indicator, interest rate decision etc.
After the initial spike, some bulls lock in profits, which allows bears to try and bring the price down but in many cases they won’t possess enough selling power to overcome the bulls, which will eventually lead to the upward breakout and trend continuation.
Due to the two patterns’ similarities in formation and outcome, they are also traded in an analogous manner. Again, we first need to measure the flagpole’s height. The entry point is above the high of the flagpole, with a distance equal of 10% of its height. The calculation and placement of the stop-loss level is also identical to the pennant pattern’s – the stop is placed at a distance of 25% of the flagpole’s height below the entry point (or 15% of the height below the flagpole’s highest point).
Once again, our first profit target is equal to the amount risked, projected up from the entry point (25% of the flagpole’s height). As soon as it is reached, we exit half of our position and move our stop-loss to the breakeven level (entry point), so that in the worst case scenario we are left with the profit from the first part of the trade. Once that is done, we aim for the second profit target, which again is equal to 100% of the flagpole’s height, projected up from its highest point (90% of its high projected up from the entry point). On the screenshot below you can see a reversed flag formation.
Rules are important
In order to improve our chance of success with both patterns, it is crucial to follow up on the entry and stop-loss guidelines we earlier underscored. It is of utmost importance to respect the entry rules to filter out potentially losing trades. In the example below you can see how a potential flag formed a flagpole but an early entry at the high of the flagpole, disregarding our established entry rule, would have gunned our stop.
The flagpole’s high and low were at 1.6458 and 1.6310, thus its height was approximately 148 pips. According to our strategy, we should have entered at 10% that amount above the high itself, but the market initially failed to rally to that point, thus you should abstain from going long.
However, if a trader was so eager to hop on the market at the high of the flagpole that he would disregard the entry rule, he can’t filter out potential failed flags. Say he entered at the flagpole’s high and he placed a stop-loss equal to 25% of its height beneath the entry point at 1.6421 USD (1.6458 USD – 0.0148 USD x 0.25). It is visualized by the red line, and as you can see it was hit, rendering the trade a loser.
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How to use flag patterns to profit from forex trading
Technical analysis can be an extremely useful tool to help you see where the forex market could be going. Get these predictions right and you make a profit. Take continuation patterns. Spot these and you have the chance to exploit a powerful trend. One such continuation pattern are flags. Let's take a closer look at how you can use these to spot a money making forex trading opportunity…
Flag patterns can be very profitable
Flag patterns are one of most popular and effective continuation patterns in forex trading.
Continuation patterns show temporary periods of sideways price action in a currency pair, which has been in an established trend. This pause occurs, then the trend resumes.
During this pause, the price just goes up and down within a trend.
These patterns can be very useful if there’s been a strong trend in play, but you missed it. Spot these patterns and you can be waiting to pounce on a trade when the trend resumes.
This 27 year old trader turned R30,000 into R150,000
He didn't spend hours in front of a computer. In fact, he only traded 30 minutes a day!
Have a look at the chart below…
The chart shows a bullish flag. This occurs during an uptrend. Spot one of these and there’s a good chance a currency pair’s trend is just taking a breather and will resume.
You’ll notice that the area where the price moves sideways is downwards sloping. In other words, against the trend.
How flag patterns form
This happens as the strong upward trend came on high volume. The price then consolidates downwards as volume falls. The sellers are taking control, but on lower volume.
Then the buyers start piling back into the forex trade on high volume. This leads to a breakout, Frank Hemsley in Profit Watch explains. The trend resumes.
You get bearish flags too. These are mirror images to bullish flags. Spot a bearish flag and it’s likely a downward trend will resume.
So there you have it. How to use flag patterns to profit from forex trading.
Finally! A simple “click-and-profit” system that lets you profit in the Forex market. Over breakfast, on your lunch break, even in the evening.
Let me show you how this USB will help you “capture” a side-income of R10,570 or more each month – just by following “dummy-proof” Señales.
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Flags and pennants can be categorized as continuation patterns. They usually represent only brief pauses in a dynamic market. They are typically seen right after a big, quick move. The market then usually takes off again in the same direction. Research has shown that these patterns are some of the most reliable continuation patterns.
Bullish flags are characterized by lower tops and lower bottoms, with the pattern slanting against the trend. But unlike wedges, their trendlines run parallel.
Bearish flags are comprised of higher tops and higher bottoms. "Bear" flags also have a tendency to slope against the trend. Their trendlines run parallel as well.
Pennants look very much like symmetrical triangles. But pennants are typically smaller in size (volatility) and duration.
Futures and options trading carries significant risk and you can lose some, all or even more than your investment.
Stock trading involves high risks and you can lose a significant amount of money.
The information contained here was gathered from sources deemed reliable, however, no claim is made as to its accuracy or content. This does not contain specific recommendations to buy or sell at particular prices or times, nor should any of the examples presented be deemed as such. There is a risk of loss in trading futures and futures options and stocks and stocks options and you should carefully consider your financial position before making any trades. The reference to statistical probabilities does not pertain to profitability, but rather to the direction of the market. The size and the duration of the markets move, as well as entry and exit prices ultimately determines success or failure in a trade and is in no way represented in these statistics. This is not, nor is it intended to be, a complete study of chart patterns or technical analysis and should not be deemed as such.
Trading with Flags And Pennant Patterns
Today we will discuss some more chart patterns that occur periodically. These two patterns actually occur more regularly than I once thought, so I have decided to include them in here. These two patterns are flags and pennants.
The reason why we are discussing flags and pennants together is because they are very similar. the only likely difference is that the trend lines that make up the flag pattern are parallel to each other but those of the pennant converge.
FLAG What makes up the flag pattern? The flag looks just like the flag on a mast, with candlesticks that form the mast, and other shorter candlesticks whose highs and lows can be joined together to form the borders of the flag.
There are two types of flag patterns: the bullish and bearish flags. a) Bullish flag patterns form during an uptrend. b) Bearish flag patterns, form during a downtrend.
PENNANT A pennant looks like a flag, but the upper and lower trend lines that form the borders of the pennant converge towards each other. A pennant is also a continuation pattern, with two varieties: the bullish pennant and the bearish pennant.
a) The bullish pennant is seen during an uptrend. When it occurs, the trader should prepare for a continuation of the uptrend.
b) The bearish pennant is seen during a downtrend. Its appearance should alert the trader to a continuation of the downtrend.
Many times, we see flags and pennants occurring one after the other on the charts.
Trading with Flags and Pennants The first place to start is to monitor the charts. Once you observe a particularly strong trend, then it is likely that a flag or pennant will appear. They appear as areas of retracement after a period of trending prices, and retracements always follow strong trends as traders who got in early take profits.
The moment a retracement occurs, draw trendlines to connect at least two areas of price highs and lows of the candles forming the retracement pattern. Once the trend lines can be seen to either converge or form parallel lines to each other, you have your pennant or flag.
The final piece of the puzzle is knowing when to pull the trigger, which should be at the open of the next candle following these confirmatory signals:
& # 8211; Bullish flag/pennant: Stochastics at oversold levels (i. e. <25) or appearance of bullish candlestick patterns. These signal the end of the pattern and a possible continuation of the trend.
& # 8211; Bearish flag/pennant: Stochastics at overbought levels (i. e. <75) or appearance of bearish candlestick patterns. These signal the end of the pattern and a possible continuation of the downtrend.
Using Fibonacci to Trade Flag Patterns
Professional Trader & Analyst,
As I mentioned in a recent Charts in Play. flag formations are one of my favorite chart patterns to trade. These triangles generally represent continuation patterns or pauses in a major trend.
Therefore, when you are looking to trade or invest based on flag patterns, you have already made a decision about the direction of the major trend.
When a flag is formed as an interruption in the major uptrend, it is often referred to as a "bull flag." The formation of a flag during a downtrend is, therefore, known as a "bear flag."
In addition to simplifying the major trend analysis, one can also use Fibonacci analysis on the flag formation to give you an objective entry-level protective stop, as well as an initial profit target. This allows you to clearly assess the risk and reward of each trade.
The flags can take a wide range of shapes, as some are quite simple and others are quite complex. Often in a major trend, you will see a number of flag formations that can occur over a several years within a major up - or downtrend.
Click para agrandar
During the 2007-2009 bear market, there were quite a few "bear flags" evident on the daily chart of the Spyder Trust (SPY ).
In 2008, there was a classic bear-market rally from the March 2008 lows that ended in May. The SPY had topped out on October 10, 2007 at $157.52 (point 1), and the first wave of selling took SPY to a low of $140.66 in late November.
The ensuing rebound was quite sharp—this is typical in bear markets—as SPY gained 8.9% in just 11 days before the decline resumed. The next wave of selling was much more severe; the SPY dropped from $152.89 to a low of $126 (point 2) in late January 2008.
The 17% decline pushed sentiment to extremes. By February, most newsletter writers were convinced that a new bear market was underway. The SPY retested the January lows in March (point 3), setting the stage for a bear-market rally.
Flags are often formed in reaction to extremes in sentiment. By the time the bear flag was completed in May, many of the February bears had turned bullish on the market.
By the middle of April, SPY had formed an upward trading channel (lines b and c). With the peak in May, a more pronounced flag formation was evident. The Fibonacci retracement resistance levels calculated from the October high (point 1) and the January low (point 3) allowed one to define the levels where the rally could be expected to fail.
The 38.2% retracement resistance at $137.60 was tested in April, but SPY was unable to close above it. Two weeks later, SPY did close higher, setting the stage for a rally to the 50% retracement resistance at $141.22. (For more, see Fibonacci Analysis: Master the Basics .)
Typically, bear-market rallies will fail near or slightly above the 50% retracement resistance. If the 61.8% retracement resistance at $144.81 was exceeded on a closing basis, it would suggest that one’s analysis of the major trend is wrong.
Once the 50% retracement resistance level was first reached on May 2, the focus was clearly on the short side as a broader flag formation (lines a and c) was then evident.
Now, there are two main ways to trade these flag formations. One is to identify a selling zone, using a stop above the 61.8% resistance levels. Or, alternatively, one can wait until the flag formation is completed.
The first setback from the test of the 50% retracement resistance lasted five days and held the uptrend (line c). As SPY again turned higher, the target selling zone was either the prior high at $142.37 or the midpoint between the two resistance levels, which was $143.01.
In determining your selling level, one must of course compare it to your stop level, the potential profit target, and then decide the amount of risk you are willing to accept. Selling at the prior high of $142.37 would have made it quite likely that your trade would be filled—or, alternatively, you could sell closer to the halfway point between the two retracement levels.
Since markets often stop at round numbers a bit under $143.01, a point like $142.88 would have made sense. SPY formed a doji on May 19, 2008, as it made a high at $144.30.
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Forex Signals - EUR/USD Bullish Flag Pattern
Daily Outlook: Pair is bullish after Friday's fireworks on further US job weakness. The pair jumped 160+ pips in just a few hours on the news - but this wasn't unexpected technically either. Take a look at the daily chart, or even the 4h chart and you'll see a nice gradual uptrend with hardly a bear in site. I will stick with the uptrend and look for buying opps. Currently the pair appears to be consolidating into a bullish flag pattern under 1.33, which signals more potential gains for the Euro.
As always check the free candlestick alerts (or CandlePro if you have a seat!) for intraday trading opps and watch out for news events on the forex calendar .
Trading Idea: Primary trade will be conservative: long in the vicinity of 1.3215 support, with targets at 1.3240, 1.3270, 1.33 and 1.3330 for 115 pips profit.
A much more aggressive long with a decent reward/risk ratio would a long on a failure to close below 1.3260 with long targets at 1.3290, 1.3320 and 1.3350 for 90 pips profit.
Recap: It's always a matter of details as usual. If you took the aggressive primary trade (I listed all trades Friday as aggressive) then you shorted the 04:00 4h candle on the failure of 1.3200 again. That trade would have hitten our first TP at 1.3175 gotten you about 40+ pips in the profit in total before skyrocketing upward the next 4h candle. For CP users that UJ bearish candlestick I pointed out at the bottom of Friday's post would have gotten you about 80 pips in the profit before the weekend.
Estrategias Forex Estrategia Forex, Estrategia simple, Estrategia Forex Trading, Forex Scalping
Pattern «Flag» on the currency market are often but not as strange, all describe what is usually a good pattern, but basically no detail was not clear working strategy forex enter the market. after it was spotted this graphical combination.
For trade I recommend to choose Forex Broker with MT 4 terminal .
I propose to consider a fairly simple system to enter the market, using this combination — «Flag + ABC».
Very often, it appears after a prolonged or sudden movement. and is nothing like zone correction for further continuation of the trend.
Consider the essence of strategy forex «Flag + ABC»:
1. We find a sharp movement in the price chart — momentum and see how events develop in the future.
2. Ie must be remembered that after the sharp movement is usually consolidated and now that we are waiting .
3. Under this strategy, forex, do not make deals with the first fall-back — have to wait until we see the completion of the formation pattern of «Flag».
4. Our task is to wait and see on the price chart 3 waves: A, B, C in the pattern «flag» (see example below) :
5. This graphic is called a combination of many different ways — some nicknamed her ABC . That’s our job to wait until the last wave is formed with, and only then, at the end of the C wave, we will enter the market in the direction of the trend — in a limit order (in this case, Buy Limit).
6. But always worth remembering that only one ABC — that’s no reason for the transaction. Since login to want to find at least 3-4 trading signal to the input — this can be divergence, according to rollback levels Fibonacce (and very good, if our point C would be exactly the level of 38,2 or 61,8% of Fibonacci from the previous motion ).
7. In this case, as soon as we have already identified the movement, and presumably we have point A and B — we are over the top (for downward movement on the contrary), and point B — and a line parallel to construct a parallel through the point A — then we have drawn channel .
8. And only now can the line of the channel, carried out through a point A to place a limit order to buy or to sell, respectively, but do not forget the additional trading signals — for example Fibonache or divergence, lines of support and resistance line of the channel, etc. (see the examples at the end of the strategy — which may be additional signals).
9. Take-profit . I recommend to put on the census hai or low, respectively, or else pull up a safety stop-loss in the positive zone with trailing stop .
10. A safety stop-loss - set for the next level of Fibonacci — for example 50% or preferably 61,8% — if C falls on 38,2%, etc. — If at 61,8% — 76,4% for the set — no further recommend that, because on the market may just turn around.
11. Also do not forget that the market is not perfect, and point C has a tendency not to reach or fall below the line channels corrective movement (on this, if a limit order is not successful, then buy at the market price, if already formed reversal bar).
And do not forget that these combinations do not always arise and need to keep track of different time frames .
Examples of «Flag + ABC» in including in the promptness with various indicators, channels, muvinshami, Fibonacci levels:
Profiting from Flags and Pennants
Flags and pennants are much more common than the cup and handle pattern, and can occur even on short term charts. They can be seen in uptrends and downtrends. Today we demonstrate how to recognize them and also to use them for trading, making some good money as a result.
Flags and pennants are similar to each other, with the exception that the flag is usually bordered by parallel lines while the pennant is bordered by convergent trend lines. Whether the trader identifies the pattern as a flag or pennant, the result of the price action as well as the methodology of trading the pattern is the same.
Flags and pennants are short term patterns which in the context of what these patterns do to price action, are also classified as continuation patterns. They represent periods of price consolidation within the context of the existing trend, and the end result is that the price action breaks out from the pattern to continue in the direction of the original trend. Flags and pennants are not easily recognized with the naked eye and that is why traders need to train themselves to recognize flags and pennants when they occur.
What Makes Flags and Pennants Similar to Each Other? Flags and pennants tend to be discussed together because they share the same characteristics and they exert the same effects on price action.
& # 8211; Flags and pennants have flagpoles, which are formed by the distance between the break of the first support or resistance preceding the pattern, to the low or high of the new flag or pennant.
& # 8211; They are short term patterns whose breakout price movements usually last between 1 to 8 weeks.
& # 8211; The breakout move which forms after the chart pattern is broken is marked by heavy trading volume. Therefore, it allows traders to confirm that the breakout is genuine using the volume indicator on the MT4 platform of Forex4you. Flags and pennants that are marked by breakouts with low volume will not produce reliable trading signals.
Flags occur in both directions; upside and downside. This means that we can have bullish flag patterns and bearish flag patterns.
The flag consists of the flag pole, which is a vertical line that can be traced from the break of the immediate previous resistance to the trend line high of the period of consolidation that constitutes the flag (bullish flag) or a vertical line that is traced from the break of the immediate previous support to the trend line low of the price consolidation (bearish flag). The flagpole is usually accompanied by heavy volume, which can be shown visually as an increase in the trading volume on the volume indicator.
Following the flagpole is the flag itself, which is a period of consolidation that is contained in a descending channel from the flagpole (bullish flag) or is contained within an ascending channel (bearish flag).
Following the formation of the flag, price is expected to either break to the upside (bullish flag) or break downwards (bearish flag).
This is what the flag pattern looks like:
We can see the resistance line which was broken, and then we also see the flagpole which is the vertical line that is traced from the broken resistance to the high of the descending channel constituting the flag. This is also marked by an increase in volume shown by the volume indicator, and we can also see the price action breaking out to the upside. This is an example of a bullish flag.
A pennant resembles a flag in both formation and orientation, with the exception that the upper and lower trend lines that border the the pennant actually converge towards each other, forming a symmetrical triangle. The pennant also has bullish and bearish varieties.
The pennant starts with the pole, which is the vertical line drawn from the break of the immediate previous resistance to the trend line high of the symmetrical triangle that constitutes the pennant (bullish pennant) or a vertical line that is traced from the break of the immediate previous support to the trend line low of the area of price consolidation that forms the pennant (bearish pennant). Again, the flagpole area is marked by heavier trade volume, detected by the volume indicator.
Following the flagpole is the flag itself, which is a period of consolidation that is contained in a descending channel from the flagpole (bullish flag) or is contained within an ascending channel (bearish flag).
Once the pennant is fully formed, the price is expected to break to the upside or downside for the bullish and bearish pennants respectively.
This is what a pennant looks like:
Once again, we can see that there is a support level which has been broken, and then the pennant formation. Note the trend lines which form the triangular pennant, different from the channels that form the flag.
HOW TO TRADE WITH FLAGS AND PENNANTS Now that traders know what is expected to happen when flags and pennants appear on the charts, how can this knowledge be transformed into dollars in the account or money in the bank?
Step 1 The starting point to trading with flags and pennants is to be able to recognize these patterns when they form. Flags and pennants usually follow periods where there have been strong trends. If a trader opens a four hour chart for instance, and sees that the currency pair has been in a strong trend, then there is a strong chance that a flag or pennant will form as price moves into consolidation either through profit taking or traders deciding to take a breather to prepare for the next move. Recognizing a flag or pennant can either be done visually by the trained eye, or can be done using chart pattern recognition tools. The tool supplied by Autochartist is a very good one and is able to identify flags and pennants either when they are in evolution or when they are complete. It is usually advisable to use the web-based version of this tool, as my experience has shown that this works much better than the MT4 version when it comes to detecting flags and pennants and performing the required trade analysis that follows.
Step 2 Once the flag or pennant has been identified, the final piece of the puzzle is to take the trade at the break of the flag or pennant. The principles of trade are similar to those used to trade breakout patterns.
Wait for the candlestick in view to break above the upper trend line bordering the descending channel (flag) or the triangle (pennant). Once the candlestick closes above the upper trend line, then the breakout has occurred. It is usually advisable to wait for the price to try to go back to the upper trend line before executing the trade. The trade can be executed using a market buy order for traders who are on top of the situation watching the charts, or using a Buy Limit order set at the time the candle has broken above the upper trend line, using the price that corresponds to the upper trend line as the entry price. The stop loss can then be set below this trend line (i. e. within the descending channel or the triangle that constitutes the flag and pennant), while the profit target can be set at the trader’s discretion.
The trade can be confirmed by the application of the Stochastics oscillator, waiting for when the indicator is at oversold levels (less than or equal to 20) or the appearance of candlestick pattern that supports a bullish movement. Increase in trade volume also indicates that the breakout move will be strong. Flags and pennants are best traded on the 4 hour and daily charts, where they produce large pip profits.
The candlestick in view should be allowed to break below the lower trend line bordering the descending channel (flag) or the triangle (pennant). Once the candlestick closes below the lower trend line, then the breakout is complete. Wait for the price to attempt to return to the lower trend line before executing the trade. The trade can be executed using a market buy order for traders watching the charts, or using a Sell Limit order using the price that corresponds to the lower trend line as the entry price. The stop loss can then be set above this trend line (i. e. within the descending channel or the triangle that constitutes the flag and pennant), while the profit target can be set at the trader’s discretion.
Trade confirmation is done by applying the Stochastics oscillator, and confirming that the breakout occurs when overbought (greater than or equal to 80). Increase in trade volume or appearance of candlesticks that support the downside move also serve as confirmatory signals.
Conclusion We advise that the trader should sign up with Autochartist so as to be able to use the web-based version of the chart pattern recognition tool not just to recognize the patterns, but also to do the following:
a) Detect a pattern that is either in evolution or is complete and ready for trading. b) Detect the area which can be used as a profit target, shown by the grey shading. c) Look at the time frame on which the patterns are detected so as to know how long the trade will be active. This information can be used to make a quick decision on whether the reward for the trade justifies the time in which the capital is tied up in the trade. d) Determine the strength of the signal and know if it is worth trading. This prevents you from tying up your money in unviable trades, but making capital available for viable ones.
¡Atención! Los puntos de vista del autor son enteramente suyos.
Por Jim Scharman
In recent weeks, I have been discussing technical trading using several different technical tools such as Moving Averages, Stochastics, ADX, etc. Today, I would like to discuss some price action patterns to help identify good entries. The first thing to do when looking at price action is to identify the trend. A trend in the markets can be a fickle thing; trends run, then fizzle, start and stop, continue and reverse. Once a trend forms is doesn’t go straight up or down, but will have retracements or pull backs. The very nature of supply and demand assures that there are natural levels of profit taking in most market moves. One of the most important elements of successful trading is identifying these “resting” points and if they are just “resting places” or are they actually a market reversal or a “change in direction.” This is where analysis of price action comes in. We can use certain price patterns based on this price action to help determine if these pull backs are possible setups for an entry.
One type of price pattern we can use is a continuation pattern such as a Bull Flag or Bull Pennant for an uptrend continuation or Bear Flags and Bear Pennant for a downtrend continuation. These patterns help us to identify areas of continuation, looking at a pull back or a consolidation and resumption of current trend after the pull back. Here are some examples of what these continuation patterns look like:
Flags and pennants can be generally categorized as continuation patterns. These price patterns usually show brief pauses in a strong trend. They are usually seen right after a larger quick move. The market will often pick up again in the same direction. Over time these continuation price patterns are very good at identifying potential entry points.
Bull flags are characterized by lower tops and lower bottoms, with the pattern slanting against the trend. But unlike wedges of a Bull Pennant, their support and resistance lines run parallel.
Bear flags are comprised of higher tops and higher bottoms. “Bear” flags generally slope against a strong down sloping trend.
Pennants are similar to flags but are not parallel and look very much like symmetrical triangles. Pennants are also generally smaller in size or volatility and duration than Flag patterns.
Here is a recent example of a classic bull flag patterns in an Uptrend market for the SP-500:
Note in the graph above that after a move up, the Bull Flags are formed by the lower highs and lower lows, in a flag type patterns and once the price broke above the flag it resumed the bullish uptrend and continues the previous up trend for a very positive gain. The best way to take advantage of this pattern is to set a “buy stop” entry order close to the top of the pullback so that if the trend resumes to that level you would be triggered into the trade to take advantage of the continuation. The same patterns apply to down trends by forming “Bear Flags” in the reverse pattern and with a “sell stop” entry order.
Take some time to look for these Flag price patterns as a great way to identify entry points after they break out of the pullback.
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Learn free Flags charts patterns in Urdu | Hindi
Salam o alaikum all my Dear Traders Today I’m going to teach you A free chart pattern which is called flags. It’s most popular and profitable pattern. almost every Good Trader use this pattern for his Forex Trading. so Today I will teach you how to trade with upward flags and downward flags. A flag Pattern is a continuation pattern and work’s very simple
Comprar. when price close above the flag’s Resistance line
sell . when price closes below the flag’s support live
If you want make more profit from this pattern then you must learn support and resistance . In this Video I will also teach you about High and Tight Flag, it’s makes more pips for you. I love this pattern because I earn high profit from this pattern so I suggest you watch this video and make your own rules, last thing pleas try every pattern on demo first then on your real account. This is only one pattern I teach you free, I have to teach you 33 other Chart patterns in my paid Training so join me and learn much more….
Flags charts patterns in Urdu | Hindi Video Pleas comment blow, if you have any question or feel free to call me for paid Training. Thank you for watching video pleas share with you friends if you like this Video
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Watch a video on the Flag Chart Pattern as well as the related Pennant Chart Pattern. The Flag pattern usually occurs after a significant up or down market move. After a strong move, prices usually need to rest. This resting period usually occurs in the shape of a rectangle, thus the word "flag". The Flag is considered a continuation pattern because after resting, prices will usually continue in the direction they did before.
The chart of eBay (EBAY) shows many Flag patterns:
Flag Potential Buy Signal
When price has moved higher and prices have consolidated, creating a channel of support and resistance, a potential buy signal is given when prices penetrate and close above the upward resistance line .
Flag Potential Sell Signal
Assuming prices previously moved downward, then after a period of price consolidation, a potential sell signal is given when price penetrates and closes below the support line .
For more information on the concept of support and resistance, (see: Support & Resistance ). Another similar pattern discussed is Triangles (see: Triangles ).
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Estrategias Forex Estrategia Forex, Estrategia simple, Estrategia Forex Trading, Forex Scalping
Today we look at another important and quite often appearing on the charts forex currency pairs figure charting — pattern «Pennant» bullish and bearish, as well as consider its differences from other, similar to a technical analysis of the figures, their differences and bargaining strategies in the forex market, the formation of the formation.
Recall that earlier we discussed with you for 2 pattern forex: Flag + Triangle and viewed as these deals for the 2nd model. Pending today’s models have some common features with the flag and the triangles and we consider them in more detail.
Description of the pattern «Pendant»:
This is the classic figure of the technical and graphical analysis in particular, is very similar to a symmetrical triangle (that is, the figure is well balanced), but with less time formation, and the trend line, of maxima and minima figures strongly agree.
And the flag in this figure is the same thing in common: Pennant — is just a figure continuing trends in the market! That is, the same flag, slightly directed against the flagpole, but the bottom line was not parallel to the top, and converges as the triangle. And it is the presence of the flagpole and features the same pennant from a symmetrical triangle.
Pennant is 2 types:
Bull — pointing up the flagpole and pennant is located at its maximum (for example in the figure above).
Bear — sent down the flagpole and pennant is formed at a minimum of movement.
Forex strategy trading pattern «Pennant»:
1) The graph is present a pronounced flagpole or pulse
2) At the top or at the minimum figure is formed. it napominayaschaya symmetrical triangle, but quickly emerging and reminiscent of the usual «pennant»
3) Draw for the minima of the pennant and the trend line for the maximum as the trend line. the result is a small triangle, similar as in the chart below
4) To enter into a transaction is usually best after the breakdown of one of the trend lines continue in the direction of motion relative to the flagpole:
- Be of a pending order buy stop for Bull pennant or sell stop to bear
- After the breakdown of what happened already . and closing the candle of the interval on which trade above or below the pattern (for example if it is clockwise, then at the opening of the next hour, we conclude a deal in the direction of the breakdown)
- To retest a broken trend line pennant — this is the best option transactions, although it is certainly not always the case.
5) Set the stop-loss at a minimum lower or higher than the previous local minimum or maximum shaped graphical model.
6) Take-profit set at least a distance equal to the widest side of the pattern. Or an important resistance level for the price, according to the rules of forex charting. Ideal — a profit equal to the height flagpole (see first picture above).
Despite the fact that knowledge is considered a pattern certainly helps traders trade in the trade, but even if you just use the rules of trading chart patterns on the breakdown of the trend line, you just can profitably sell this graphical model, as all completely graphical models are traded the same way.
Flags and Pennant Forex Strategy
Hey, traders. Welcome to video 11 of the Advanced Forex Strategies Course. In this video, we’re looking at the flag and pennant strategy. Plus, we’re going to look at a few other insights, which I think you can apply to all these other strategies and give you a little bit better idea of what it takes to be a successful trader. These patterns will occur on all timeframes. Brought to you by Investoo. com.
So, trend trading, as I always say, is where the money is. Flags and pennants breakouts provide a way for you to get in on the next trending move. As always, our risk will be lower than our potential reward. You’re going to see these types of patterns on all time frames. Flags are going to be our focused. Pennants are very similar and traded in the exact same way, but flags occur more often.
So, trade in the direction of the trend, which is the direction of the flag breakout. Flags are called a continuation pattern, since they slightly more often than not break out in the direction of the prevailing trend. So, if you have a short move down, we’ll have a flag, which we’ll learn about in a second. Down flag. We expect it to drop down about 55 to 60% of the time. Quite a bit of the time though, 40 to 45% is going to go the other way.
So, make no assumptions. A breakout in the opposite direction of the trend is also tradable. With this strategy, we can set and forget. No touchy - touchy. Let math do the work. Only trade neat flags. If in doubt, use the mini channel breakout strategy we covered in video three.
An upright flag has two parts. The first is a sharp upward move, which we call the flagpole, followed by a very tight consolidation that is angled slightly lower or sideways. Very rarely, it is angled slightly up. We draw lines along the highs and lows of the consolidation. Consolidation should be at least four bars and the breakout level neatly defined. I’ll show you exactly what I mean by that when we look at the videos or the examples.
When the price moves above the confines of the lines, enter long. Place a stop just under the pattern. Target is the height of the flagpole added to the bottom of the flag. Don’t use extremes in price. Once again, we’ve gone over this in prior videos. It’s much better to get out of a trade than to be a bit too aggressive and miss your target by a few pips.
Only measure the sharp moves, and don’t measure slow-downs before the consolidation. I’ll show you exactly what I mean by that in the examples. When in doubt, use 1.6 times your risk as your target. If you take multiple positions, exit one position at 1.6 times your risk and the other position at the target. This is a fusion, I guess you could say, of the mini channel breakout strategy, which is similar but a couple differences. So, this is taking some of the elements of that, which is a strategy I like, and applying them to this.
Risk must be kept below 1%, regardless of how many entries you take, even if you’re using the multiple targets or stops. Keep the risk on all the positions on that setup below 1%. In the alternative case, if we have this upward flag but the price drops below the flag, we enter short. Stop goes above the pattern. Be even more conservative with the target, since we’re going against the prior trend. We knock off approximately the height of the pattern.
An upside-down flag has two parts, once again. First is a sharp move down, which we call the flagpole, followed by a tight consolidation that is angled slightly higher or sideways. Very rarely will it be slanted down. Draw lines along the highs and lows of the consolidation. Consolidation should be at least four bars with a breakout level neatly defined. When the price moves below the confines of that flag, we enter short. Place a stop just above the pattern.
Same target. We’re using the height of the flagpole. Subtract it from the top of the flag. Don’t use extremes in price. You also have the option of using the 1.6 target, if you like. Risk must be kept below 1%. If the price rallies above the flag, we enter long. Stop goes below the pattern. We want to be conservative again, since we’re going against the prior move. We’re going to knock off a bit of that profit target.
So, I’ve chosen a few entries here on purpose. They’re not all that pretty, to be honest. I’ve chosen them for a reason, simply to tell you about a few other insights into trading. So, I’ve written something here. For all these strategies, the exact entry doesn’t matter. Over a great many trades, it is simply that you make more on. Oh, that got cut off. more on your winners than you do on your losers, and win about 45% of the time.
So, if you can win more than 45% of the time and make more on your winners than on your losers, it doesn’t matter if I say this is how I trade a flag pattern and someone else trades it slightly differently. The point is that as long as we have this, overall we’re going to end up being profitable. So, we have this flag here, a very sharp move down, followed by this consolidation. Now, I’ve used this one on purpose, simply because we have a high that’s defined by three bars here, and we have a fourth bar. So, we have at least a four-bar slowdown. We have a low that’s defined by the major low and also by these four bars here.
So, the first question a lot of traders will ask is, “Do I go short here? Or do I go short here?” What I’m trying to tell you is that it doesn’t really matter, because on some trades you’ll go short here, and if you do this trade 100 times in your career, this is going to work out. This is going to work out. Sometimes you’re going to lose on it. Sometimes you’re going to win on it. At the end of the day, it all comes out in the wash.
So, there is a potential entry here, where you could say, “All right. That pulled back.” But now, we have a consolidation. This is the flag. I’m going short. You go short right at this white line as this bar drops below it. You put your stop up here, just above the highs of the pattern, and you ride the momentum down. Or you could say, “No, this is the very low of the pattern. I’m going short here, putting my stop up here,” and ride it down.
So, in either case, this broke out, pulled back. You wouldn’t have been stopped out though, and we continue to the downside. So, this is a flag - type pattern, where we have a sharp move, it pauses for at least four bars. We do have defined entry points. By that, I mean you have at least a couple bars that highlight an entry point.
Now, we need to figure out our target. So, once again, as we’ve looked at in a few videos, this can be tricky. On the triangles video, I said don’t use extremes. I showed you how to do it. Here, we’re going to do the same thing. So, we have this sharp move higher. Now, technically once it gets here, we’re in free-fall. We’re not in free-fall yet. You can see, while we started up here, we pulled that quite a bit. This bar is where we start to notice a lot of downward movement. So, I’m using that, the actual start of that decline, where it’s relentless.
Down to here, can’t really pull back, and it comes back to this point. This, to me, this area tested multiple times. I like that as my target. I’m not going to use this extreme down here, because it wasn’t hit very often, bounced right away off of it. Whereas this area, it did bounce, but it came right back to it. So, this is a target that I like.
I can quickly compare, regardless of which entry point I used, whether it’s that one, I can see this is my risk for that trade, and my target is much bigger. Even if I enter down here. In that case, this is my risk from my stop to my entry point. So, that represents my risk, and my target is still bigger. So, the target goes from the top of the flag. So, we put it right at the top of the flag, and we can see our profit target would have been right down here, and we would have got out of that before this mess here. If not, we still would have been able to get out down here.
But, notice if I would have been extremely aggressive in my pricing of this or in my target, and said, “Okay. That’s how much we’re going to drop,” I would have been way off. Even though this came all the way onside and would have showed me a nice profit, I missed my target by a long shot. Be conservative. This is not looking at things in hindsight and saying, “Oh, I need to be conservative.” We need to be conservative all the time, because this sort of thing is going to happen a lot. If you’re too aggressive, you’re not going to hit your target.
I looked at one other one too, which is a bit ugly, a bit different structure. I want to highlight a few things here as well. We have this sharp move down. Once again, it hits this level multiple times. So, I don’t mind using that as my target. Let’s change the color of that. This one, a little more ugly since it’s not relentless selling. We kind of want to see that relentless momentum like what we saw here, where it’s just boom. But in this case, it’s still okay.
We can see there’s still overall selling. There’s no real buying going on. Then, we enter this pause at four bars, basically here. We don’t have any clearly defined breakout areas if we were just looking at this in real time. Basically it’s just slowed down, but we don’t have a flag yet.
As more bars develop, we can start to see, “Okay. Along the bottom here, I have a potential entry point based on the lows of these.” So, I can draw a trend line there. Along the highs, we also start to see this as well. We’re edging higher. Lows are edging up. So, here, we start to see a big longer - term flag. As we can see, this is much longer than four bars, but the flag develops over those higher numbers of bars.
We have a pop higher here, which I’ve highlighted and said, “Rising equals expected.” We are making slightly higher highs. We see this. We see this rising. So, I wouldn’t trade this breakout, even though it pops above these bars, simply because we’re almost expecting that the price is going to edge up a bit. If this pattern continues, that is going to occur. So, don’t trade that first one going against the prior move, simply because this is not a high probability trade.
Based on these prior moves, we know that these lows. sorry, these highs are creeping up. So, we don’t want to trade something that’s just potentially creeping up. On this type of flag, we would much rather see the break to the downside, as we do with most trend trades. We’d rather see it go in the trending direction. But, since we have a tendency here of the price creeping up, do not trade a breakout when the price is creeping up.
So, here, looking at this major decline from the high of the pattern. So, our target would have been down here. Not going to let me select. There we go. So, once again, we can quickly see if our risk is greater than or less than our reward. So, entry point would have been right about there, our stop just above that high, basically would have been the high of this box if I just move it down a little bit.
So, here’s our risk, from this point to our entry point. We can see our expected profit much bigger than that, so a good trade to take. Line that up. Get our target down here. So, if you want the actual numbers, we can look at that. So, we’re looking at about 30 pips of risk. We can see 301 there. That means 30.1 pips. Moving from the entry point down to our target, looking at about 46 pips of profit.
So, once again, a few insights here. Focus more on letting the winners run out to your targets. Like I’ve said in every video: no touchy-touchy. Just let the math do the work for you. That’s what matters over the long run, not whether you take this trade here or this trade here. Another thing I want you to think about is the tendency of the price action. We are seeing that the price is making slightly higher highs. So, when this edges above your trend line, we know that the price is making slightly higher highs. So, don’t trade that as a breakout, because we have a tendency already.
Whereas this, when this makes a lower low, that’s a slightly different tendency, and also we have a flag. So, we have downward momentum. So, we want to trade more the downside breakout in this case than trading this. Now, if this rockets up then pulls back, we might have some evidence to go long, but that is a different strategy, which we’re going to cover in future videos.
For right now, look at the tendency and say, “All right. We’ve just gone down. We’re slightly rising. So, if this just peaks above that trend line, that’s not a good trade to look for.” I would rather wait for this downside breakout, simply because it shows a different tendency. The price is making a lower low here, and I’d rather participate in the downside. Once again, be conservative with your targets. Measure it out. Look at just the strong moves, and it’s from the top of the pattern.
So, every trade has a stop and a target. We put those out right when we place the trade. Risk 1% or less of your account per trade. That way, even a string of losses won’t draw down your account. These take time to practice and spot and trade. They look easy, but there are lots of similar looking patterns that are a low probability. When in doubt, trade the mini channel breakout strategy in the direction of the trend only. So, go back, Look at that video if you don’t remember it.
Make sure there is a sharp move followed by a very tight consolidation or flag. If it doesn’t have the right look, don’t trade it like a flag. Trade in the breakout direction. Place stop just outside the pattern on the opposite side of the breakout. Target is based on the height of the flagpole. For an upside breakout, we add that height of the pole to the bottom of the flag. For a downside breakout, subtract the height of the pole from the top of the flag. I use that measuring tool on just trend lines. Makes it very easy to quickly see whether your risk is greater than your reward.
Be conservative. The reward will typically more than compensate for your risk. If taking a trade in the opposite direction of the trend, we didn’t look at that because we didn’t have any examples of it. But, if that occurs, reduce your target by about the height of the flag. So, whatever your stop is on the position, knock that off your target, which means in a lot of cases, it’s not going to be a worthwhile trade.
So, usually we want to be trading in the trending direction. We looked at that one example. We had the false breakout to the upside. We skipped it because there was a tendency for that price to be edging higher in that flag that was angled up. So, we also have an option to use a 1.6 times our risk. This is sort of a hybrid of the mini channel breakout strategy. So, if we’re holding multiple positions, you can get some out of that 1.6 and hold the rest for a target, for the full target, based on the pull.
Trading involves substantial risk of loss. Only trade with capital that you can afford to lose. Test out strategies before using them to make sure you are able to implement them and that they work for you. Until next time, happy trading.
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The flag pattern in forex scalping is understood as the limits of an upper or lower range pattern that could be trade to exploit benefits without taking big risks. They usually last for 30 or 60 minutes.
With this kind of pattern the trade strategies can be applied without the risk of big losses because the volatility is almost inexistent. There are no great expectations of big gains and the activity could be quiet unexciting.
In the graphic we can observe three flags registered in the USD/CHF pair; the first and the third are perfect to trade because they consist of a simple range without change of directionality. To exploit a flag it’s important to identify the moment when the price rises and becomes closer to the upper part of the flag, when the situation reverses is the moment to issue the sell orders. In this moment we can get profit of the established range pattern by entering small and quick different sell orders.
The same happens when the price falls and becomes closer to the lower limit of the flag, traders should wait until it begins to rise again.
Scalping the market trough the flags is an easy and secure technique but traders should be careful of not to be caught in the breakout when the flag pattern dissipates and the main trend appears.
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Cup and Handle Chart pattern
Trading the Cup and Handle Chart pattern
One of the rare chart patterns, the Cup and Handle Chart pattern or cup and saucer pattern is a very long term chart pattern can take a lot of time to form. This is a very reliable chart pattern and typically offers a very low risk compared to the rewards. The cup and handle pattern is formed when prices tend to bottom out, forming a gradual decline and then a smooth rally higher. It is this formation that gets the name of a cup. Upon reaching the previous support level, prices tend to break the support turned resistance only to fall back a small distance, forming a handle.
The eventual break out from the handle, offers an immediate target to the resistance level and a measured distance of the bottom to the top of the cup formation, projected from the resistance level that is broken.
The chart below shows a typical “ cup-and-handle ” formation with the measured targets.
Figure 1: Cup and Handle Chart Pattern
The cup and handle pattern can be found in any time frame, however, it is advisable to only trade the cup and handle patterns on time frames of above H1 as these are more valid to trade.
Figure 2 below, gives an example of the cup and handle chart formation on the EURCAD pair, daily time frame. Here, we can notice how price declined to form a bottom and start to rise gradually upwards. The main points of interest are the first support level that forms the left side of the cup which gave way for steep declines. On the rally back, this same level now acts as resistance and therefore prices react in the first attempt and drop back lower.
Figure 2: Cup and Handle, Trade Example
After a minor decline, another attempt is made, this time being successful.
As with the above example, the ideal point of entry to trade this pattern is the break out of the small handle or down sloping channel . If you look closely at the handle, it is nothing but a bullish flag pattern, which, as we know is a continuation pattern. Therefore, taking long positions on break out of this handle or flag pattern with stops below the most immediate dip before the rally could see a very low risk trade in regards to the high profit potential the cup and handle pattern can represent.
The only problem with the cup and handle pattern is that does not appear that frequently and therefore, there may not be many trade opportunities coming your way. An alternative way to find out the cup and handle patterns is to first spot the bullish flag and immediate scan to the left of the chart. If you notice a rounding bottom price pattern, make use of the drawing tools to see if the cup and handle formation can be validated and then identify the support level.
In some cup and handle formations . prices when consolidating near the handle can decline a bit steeper . Therefore, it is essential to not hurry into a trade, but to wait for a successful break out and possibly a retest of the handle’s break out.
When the handle’s decline is steep, always make sure to target the support/resistance level of the cup and make it your first target followed by the eventual target which is the measured height of the cup, projected after the resistance is broken.
In conclusion . the cup and handle chart pattern is simple and easy to trade. With due practice, traders can train their eye to spot the cup and handle formations. The biggest advantage of trading this chart pattern is the very small risk to the high rewards that this pattern has to offer.
Chart patterns capture the development of crowd emotion and provide potentially high probability trade ideas with well-defined price targets and exact measures of risk management. But patterns – by themselves – do not necessarily lead to consistent outcomes. The development of chart patterns only alerts traders that one particular type outcome is more likely to occur than another. As price moves towards a selected price point, the trader pays more attention to the stock, ready to place a buy order if prices move a few ticks above that level. In other words, chart patterns signal that trading potential and the probability to take action may exist.
Chart patterns are an invaluable aid to trading, but only when they point the way to high probability outcomes. The key feature of a chart pattern is reliability. Why should we be interested in a chart pattern that works on average only 30% of the time? We’d get a better balance of probability by flipping a coin. As a “performance filter,” we must trade patterns which provide a 70% or greater probability that the pattern will develop as expected. There are simply too many ways to lose money in the market without going out of our way to trade low probability patterns.
We use this high-probability performance filter to reduce the number of useful patterns to only a handful – which also makes them easier to identify. The danger with all pattern trading is that we build castles in the sky. Instead of seeing what is really on the chart, we tend to see what we want to see. Although there are few effective ways to overcome this rose-coloured view – other than years of practice and strict adherence to our disciplines – we can improve our pattern recognition if we are more precise about the specific features we look for.
As an analogy, an automobile has four wheels, an engine, and space for passengers. This broad definition excludes some vehicles and does not help us decide which SUV is best for our family. To make a better buying decision, we need a better definition of the automobile we prefer. The same applies to pattern recognition in charts. I use very exact definitions which reduce the subjectivity and filter out look-alike patterns which have a low probability of success.
Classic Bullish Flag One of the most powerful and consistently reliable patterns is the bullish flag applied to a daily chart (see figure 1). I use this as one of my main short-term trading techniques. The flag forms when the initial Working with enthusiasm for the stock slows down. There are few sellers as most new stockholders hold onto their recently acquired positions. Buyers collect stock from long-time stockholders who are selling into the unexpected strength and who are frightened that the rally has failed completely. Gradually, prices move downwards but as you can see in figure 1, they maintain a steady trading band.
The “flagpole” is the key initiating characteristic of this chart pattern. The flag pattern only occurs at the top of a flagpole. It is created by one to five days of extreme and continuous price action moving in the same direction. There are no significant retracements during the construction of the flag pole. A flag is not a triangle nor is it a pennant. Like most flags, this pattern has parallel sides. Identification starts as prices start to pull back from the high created following the flagpole. We want two to three points to plot a tentative down-sloping trendline. This is the starting point for the pattern and it usually takes a minimum of three days to confirm.
Once the upper straight edge trendline is plotted, we hunt for the potential parallel trendline to define the lower boundary in this pattern. Simply take the upper trendline and plot it as a parallel line using the most recent low in the emerging pattern. We do not have to wait for two or three lows to develop before we plot the trendline. Instead, we infer the position of the lower parallel trendline and plot it from a single low. We then look for future price action to confirm the initial placement.
Why rush to draw the lower trendline? In a fast moving bull market, this pattern may develop over three to five days. Sometimes there are only two lower points in the pattern and, if we wait for validation from a third, we miss the opportunities for the bullish breakout. By plotting an inferred lower parallel trendline based on the confirmed upper trendline, we give ourselves the advantage of early recognition of the pattern.
Aussie Dollar flag pattern
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Chart formation forex in flags and pennants have very similar characteristics. an element differentiates, however. the figure flag consists of two lines converge. while figure feather is constructed from two parallel lines whose slope goes against the trend in place. the flag looks down when it comes to an upward trend m and up the case of a downward trend forex market. The figure flag is more horizontal and more like a small symmetrical triangle.
the twwo chart formation forex trading in flags and pennatns take much less time to establish. they are usually established over a period of a week or two. they are affected by the same volume and measured using the same criteria, both represent a technical analysis tool invaluable for forex trader
Title Post: Flags and pennants Forex Trading Rating: 100% based on 99998 ratings. 5 opiniones de los usuarios. Autor: Herman Sucipto
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Forex Charts: Common Chart Patterns
Forex Charts: Common Chart Patterns Reviewed by ForexNewsNow on Sep 30 Rating: Read about the most common and reliable chart patterns used by technical analysts to establish forex positions in an online trading account.
ForexNewsNow & # 8211; One of the methods for making decisions based on technical analysis involves analyzing charts of a currency pair’s exchange rate as it moves over time in order to identify classic chart patterns as they form. Once one of these top chart patterns has been observed, it allows the technical trader to make a forecast about the future direction and magnitude of a market move after the pattern breaks out.
The sections below will cover and illustrate some of the most reliable chart patterns — such as triangle, wedge, flag, pennant, and head and shoulders patterns — that a technical forex trader can use to help them establish profitable positions in their online trading account .
An easily recognizable chart pattern is the triangle. As its name suggests, this pattern tends to resemble a geometric triangular shape, and is usually characterized by a period of consolidation between converging trend lines that reflect support and resistance in the market.
Triangles are among the best chart patterns and are typically accompanied by declining trading volume as the market consolidates. Although expanding triangles are also sometimes observed, most triangle patterns converge in either a symmetrical, ascending or descending manner.
In addition, triangle patterns are usually continuation patterns. This means that the market continues in the direction that it was moving in originally before it paused to form a triangle after it breaks out of the triangle pattern. Figure 1 below illustrates a symmetric triangle pattern.
Figure 1: A s chematic symmetrical triangle continuation pattern with converging trend lines and the resulting measuring objective shown with white arrows.
A wedge pattern is a consolidation pattern that looks similar to a triangle, but both converging trend lines slope in the same general direction. The slope of the wedge is typically against the prevailing market trend, and they can either be continuation or reversal patterns.
Accordingly, a falling wedge is considered bullish, while a rising wedge is considered bearish. In addition, volume will tend to increase when the market trades up inside a bullish wedge, and when it trades down inside a bearish wedge. Figure 2 below illustrates a bullish wedge pattern. Figure 2: A s chematic bullish wedge continuation pattern with converging downward sloping trend lines followed by an upwards breakout.
Flag and Pennant Patterns
The classic flag and pennant chart patterns are also among the most common chart patterns, and these continuation patterns both involve the market moving sharply and then briefly consolidating, before breaking out in the direction of the initial sharp move.
The flag pattern involves a flat or counter trend consolidation between parallel lines, while the pennant involves consolidation between converging trend lines. Each consolidation period is preceded by a sharp price movement known as the flag pole. Figure 3 below illustrates a bullish flag pattern, while Figure 4 shows a bullish pennant.
Figure 3: A s chematic bullish flag continuation pattern with parallel horizontal trend lines followed by an upwards breakout. The pattern’s measuring objective is illustrated with white arrows.
Head and Shoulders Patterns
Another common chart pattern is the Head and Shoulders. This reversal pattern can be found at either the top or bottom of a market.
The Head and Shoulders Top pattern is characterized by two highs at roughly similar levels surrounding an intervening higher high. The intervening lows also move to a similar level, forming a neckline. Figure 5 below illustrates a bearish Head and Shoulder Top pattern.
Figure 5: A s chematic bearish Head and Shoulders Top pattern bounded between parallel horizontal lines and followed by a downwards neckline breakout. The pattern’s measuring objective is illustrated with white arrows.
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Forex Video Zone
Bullish Flag Chart Pattern
November 27, 2017 at 11:59 by K. Prabhu
The Bullish Flag Chart Pattern is a trend continuation pattern that allows the trader to enter an existing uptrend. The pattern forms what looks like a rectangle that is gently falling to the right side. The 2 trendlines forms the rectangle and act as support and resistance. This is the EUR/USD 15 min chart. After an extensive move to the upside the bulls lose strength in the market. The bears hold the price from going further up. As a result price consolidates and gently makes lower highs and lower lows. The bears push the price slowly in the opposite direction of the original trend giving the pattern its rectangular shape. The bulls then gather more power and eventually price breaks and to the upside. We enter a trade when price breaks out in the direction of the original uptrend and closes above the upper trendline. The stoploss is set right below the lower trendline. For the profit target the distance of the last swing is measured before the flag pattern appeared. The same distance is placed above the point where the flag’s upper trendline ends.
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GBPUSD Bearish Flag (Feb 17, 2017)
February 17, 2017
GBPUSD suffered a sharp selloff in recent trading and is currently consolidating. A bearish flag continuation pattern can be seen on the 1-hour time frame, signaling another round of potential losses for the pair.
The mast of the flag is approximately 220 pips in height so the resulting breakdown could be of the same size, taking GBPUSD down to 1.4080-1.4100. A break below the current 1.4300 levels could be enough to signal that more losses are in the cards.
The 100 SMA is below the 200 SMA, confirming that the path of least resistance is to the downside. However, stochastic and RSI are both indicating oversold conditions and are turning higher, suggesting that bearish pressure is fading and that profit-taking might take place.
If so, an upside breakout could lead to a rally to the nearby resistance at the 1.4450 minor psychological mark, which previously served as near-term support.
Catalysts for a breakout include the UK jobs figures, with the claimant count expected to show a 2.9K increase in joblessness compared to the previous 4.3K rise. Of particular importance is the average earnings index, which is slated to fall from 2.0% to 1.9%, underscoring the BOE’s view that domestic price pressures are still weak.
Meanwhile, the unemployment rate is expected to fall from 5.1% to 5.0% although this might be spurred by a drop in labor force participation. Stronger than expected data could allow GBPUSD to recover while weak results could spur another leg lower.
As for the US dollar, the FOMC minutes are up for release and these could push the majors in a strong direction. Recall that Fed officials have been wary of falling commodity prices and global financial risks these days so market watchers could be setting up for a downbeat release.
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USD/CHF Caught in a Flag Pattern
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The Swissy has a bullish look to me. On the daily chart price breached the upper trend line then fell back a bit to the ema's which will give price a push back up. The stochastics has surfaced out from the oversold zone and is pointing up and the daily 5 ema is prepping to cross the other ema's. Moving on to the 4 hour monthly pivot chart, price has breached the central pivot at 0.8881 then retraced back down to the 144 ema and the 13 ema is heading up and has just crossed the 233 ema and the 21 and 55 is pointing up. The ema's will soon catch up with price and give it the force it needs to continue its rise.
Onto the hourly weekly pivot chart I can see that price did break through last week's high at 0.8877 then pulled back and has developed a flag pattern so i do expect price to soon break out of the trap it is currently in and continue to the upside.
Finally, on the 15 minute daily pivot chart I see that price is hovering on the central pivot at 0.8863 and is with the EUR/CHF and the GBP/CHF pairs, price has been in a tight consolidation range. Bollinger bands are closed in together and the ema's are clumped together as well so there is no real price action at this time to speak of and this is usually very common after a major move. As I have said in the past, price is like a living entity, if it moves to fast and hard it falls out of breath and needs a break and a chance to catch its breath before continuation and this is exactly what is happening. A break of the upper trendline on the 15 minute chart will be an early hintt hat price will be back on the rise.
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Pattern Recognition
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Forex Signals - EUR/USD Bullish Flag Formation
5:32a GMT - I took a small loss on yesterday's secondary trade (short around 1.3650) - I trailed the stop loss down when the pair started dropping so losses were minimal. The primary trade never produced a sell signal on the 1h chart so no trade was taken there. I know some people did profit off the initial drop from 1.3680 but for the rest of us that is why you always use a stop loss. By the way a ‘wrapper' trade is just another term for a breakout trade where you prepare to sell a downside break and buy an upside break :).
Daily Outlook: On the day the pair rose an impressive 150 pips and while I am still bearish on the pair in the medium term we have a bullish flag pattern forming currently. We have a nice 150 pip flagpole with a rising consolidation pattern (a very bullish signal). My preference would be to sell a false breakout of this consolidation pattern as I don't think the bulls will be able to hold this rally, but remember for a false breakout the pair has to return to the downside after an upward thrust.
Trading Idea: It is a cautious day, signals are mixed, but my preferred trade is to short a false breakout of the pair around 1.3760 (after an upward thrust) - short targets at 1.3715, 1.3685 and 1.3655. Secondary trade would be a long on a sustained break of 1.3785 targeting a re-challenge of 1.3850.
(click to enlarge)
Forex chart patterns images of nature
In general, the head and shoulder pattern is similar to a triple top or bottom formation. On line sale part time job. In general, a widely accepted rule of thumb among technical traders is that the more often a trend line holds, the more reliable it is. As ranges develop, indicators also establish an oscillating pattern. As its name suggests, the pattern represents a phase during which volume falls, money flows diminish, and the indicators all retreat to the signal line, or the center value. A trend line is a line that you wwwoption web companion lavasoft place over two or more price points on a chart. You won't find statements like "usually this is bullish", instead, you will see something like "This works 26% of the time and the prices rises an average of 18%. Prior to the triangle, the price had made forex chart patterns images of nature very sharp and fast spike to the upside, but as the price action lost its momentum, the bullishness of the traders gave way to the increased volatility of the expanding triangle in which the price oscillated. These patterns are also called price action trading strategies, and there are forex chart patterns images of nature different price action strategies traded many different ways. A trend with large swings can also be exploited for profit, but is more demanding on the nerves of the trader.
Forex chart patterns images of nature - us
Being a continuation pattern, forex flag patterns, by nature, are expected to travel in the same direction as the trend leading up to the flag pattern. With free online regulated broker a good stock buy or there really are the bank i earned in. Trend Channel A trend channel is a fairly regular and predictable formation that is created when the price action is confined between two parallel lines. Trading charts patterns winning forex chart patterns images of nature home dr wan forex vs forex binary options Trading why an ideal hedging method s differ fundamentally from home forexbinary options for a binary options super buysell forex trade secrets. Various Trend Patterns Those with even a brief experience with charts forex chart patterns images of nature that price action on an ordinary day is highly unpredictable and volatile. Its super buysell forex secret Due to deposit demo opzioni binarie markets comparison words list business ideas binary options secret indicator. The IDENTIFICATION GUIDELINES and TRADING TACTICS give readers a practical trading guide. Depending on the nature of the range, however, indicators can show wide fluctuations, and volatility can be forex chart patterns images of nature or low. During the first range which develops between March 4th and March 12th, we note the price moving with a gentle slope and mild speed between the two support and resistance lines at 1. Super math scalper download valuation model options trading market software buy sell exchange binary option strategies with binaryoptions. A resistance line can be constructed across the highs while a parallel support line can be drawn opzioni bimari selma diamond the lows. Two the free not trader cannot sell shares tips traders prediction strategy binary options bullet ex binary options. Please add the address to your address book. In this hourly chart of USDCHF pair, we have outlined the development of the USDCHF pair with a large ellipse. Forex chart patterns images of nature extension of BC into D is quite large, from 2.
Forex chart patterns images of nature - of this
In this event, traders should look to exit. Browsefeaturing our favorite new books in more than a dozen categories. A developing triangle with high volatility may make false breakouts likelier, which the trader must recall while evaluating his trading options.
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Bear flag pattern forex
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Trend Reversal Patterns
Trend Reversal Patterns represent geometric models on the charts of currency rates which are formed after the price level has reached its maximum value in the current trend. These patterns serve to indicate that the ongoing trend is about to change the course and their recognition helps to identify the end of the trend and the beginning of a new movement. A notable feature of the recognition of these models is that the trader is informed not only about the imminent change in the trend, but also the possible value of price movement.
The Head and shoulders graphical price pattern signals the end of trend and the following change in direction of the asset’s price. It is typically formed in a developed uptrend.
The inverse head and shoulders graphical price pattern serves as a sign of trend reversal and is expected to be followed by change in direction of the asset’s price. It is typically formed in a developed downtrend.
The double top pattern is considered a graphical price formation which precedes existing trend reversal. It is typically formed in an uptrend and is expected to be followed by a drop in prices, while the longer it takes for the pattern to be formed the more reliable it is.
The double bottom price pattern is believed to be a sign of existing downtrend reversal. Prices are expected to begin a rally following its formation, while the longer it takes for the pattern to be formed the more reliable it is.
The triple top is a price pattern generally formed in an uptrend suggesting following reversal and a drop in prices. It is considered more significant than the double top pattern .
The triple bottom price pattern it typically formed in a downtrend being a sign of a following reversal and a rise in prices. It is considered more significant than the double bottom pattern .
The brilliant graphical price pattern serves for existing trend reversal confirmation in case of its occurrence on the chart. Traditionally it appears in an uptrend.
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The continuation patterns
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The continuation patterns
Flag as the model of continuation pattern is shown at the following illustration.
Flag is the movement of the price in certain range, that is shown by red dashed line on the illustration. The potential of the movement when the price leaves the channel has at least the same size as "flagpole".
Picture 11. "Flag" continuation pattern
Picture 12. "Pennon" continuation pattern
"Pennon" pattern is one of the individual cases of the flag pattern. It is formed in those cases when the support gradually increases, and the resistance gradually lowers. From the point of view of price dynamics the consolidation takes place. The break in the level of resistance, as a rule, leads to the formation of new current trend and the potential of this movement is no smaller than the size of the "flagpole".
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Pennants Chart Pattern
A pennant is a fairly common chart pattern, especially on shorter time frames. It has a lot of similarities to a flag, as it is an impulsive move followed by a consolidation. However, while a flag forms a channel, the pennant forms a triangle at the top or bottom of an impulsive move. It can be either bullish or bearish depending on what direction the market is moving. Essentially, the way to think about it is that a triangle has formed, showing that the market is trying to build up enough momentum to continue the move that formed what would be the pole.
As you can see on the graphic below, we have an impulsive move followed by a triangle. It looks like an old collegiate pennant, hence the name. These suggest continuation when they appear.
Once we break the top of the actual triangle itself, war the “pennant”, the market is free to continue going in the same direction. In this particular example, it is a move higher. However, we could reverse this and form a pennant at the bottom of a massive move lower, and anticipate the same type of reaction, simple continuation once we break down below the bottom of the triangle in that case. In this example though, you can see that the buyers to go over and continued to push much higher. With fact, the sellers begin to lose even more money, thereby making it a bit of a self-fulfilling prophecy as they have to close out their positions.
Pennant in action.
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Bullish Pennant Chart Pattern Forex Trading Strategy
The Bullish Pennant Chart Pattern Forex Trading Strategy is based on a chart pattern called the Bullish Pennant.
Timeframes: preferably, 15mins and above
Currency Pairs: Any
Forex Indicators: none required
NEED TO HAVE SOME CLARITY HERE
Now, you should not get mixed up with bullish pennant forex chart pattern with the bull flag forex chart pattern formation, they are different but have one thing in common-they are both bullish continuation forex chart patterns.
Also do not get mixed up with the bearish pennant forex chart pattern with the bear flag forex chart pattern as they are different as well but have one thing in common: they are both bearish continuation forex chart patterns.
PENNANT FOREX CHART PATTERN vs FLAG FOREX CHART PATTERN-WHATS THE DIFFERENCE?
The only difference between a pennant chart pattern and a flag pattern is that is that a flag pattern looks more rectangular shape where as a pennant looks like a triangle. See chart below for example:
THE PENNANT CHART PATTERN
The pennant chart pattern is a common chart pattern used in forex technical analysis and it is formed when you draw two converging trendlines (see above chart).
For a bullish pennant chart pattern to form, there has to be an existing uptrend.
For a bearish pennant chart pattern to form, there has to be an existing downtrend.
the formation of a bullish pennant pattern shows a period of market consolidation
a breakout of this bullish pennant chart formation should breakout to the upside continuing the original uptrend.
so the bullish pennant chart pattern is a bullish continuation pattern.
THE TRADING RULES
When an uptrend has started, you wait for the bullish pennant formation to form.
You do this by drawing two converging trendlines and wait for price to breakout of the downward trendline to the upside.
Once price breaks out to the upside, makes sure the candlestick must close outside of the downward trendline.
Place a buy stop order 3-5 pips above the high of that candlestick that has just closed.
For stop loss, place it 5-10 pips below the low of that candlestick.
Set your take profit at 3 times what your risked or use a previous swing high point and set the price level of that as your take profit target level.
How to manage your trade: as price continues to move upward, lock in your profits by moving stop loss and trailing it behind “bottoms” that form as price continues to move up.
Here’s an example:
ADVANTAGES OF THE BULLISH PENNANT CHART PATTERN FOREX TRADING STRATEGY
100% Price Action Trading Based only on Price Action
If you’ve missed an uptrend from the beginning, the bullish pennant trading strategy allows you to get in along the way.
in a strong trending market, you will make lots of pips easily with this forex strategy.
the bullish pennant forex chart pattern does occur regularly in all timeframes.
THE DISADVANTAGES OF THE BULLISH PENNANT CHART PATTERN FOREX TRADING STRATEGY
Forex Technical Analysis Using Price Action Trading Is good but they will not give you 100% trading success rate (no forex trading strategy can give you a 100% rate)
sometimes the breakout to the upside will result in a very long candlestick which means that your stop loss may be quite large so you have to decide to take this kind of trade or let it pass by or reduce the size of your contracts you trade.
if you are not paying attention or not really focused on looking for this chart pattern, you may miss it because it does take a little bit of skill to identify it and trade it successfully.
Don’t forget to share this if you’ve enjoyed learning about the bullish pennant chart pattern forex trading strategy.
How to Day Trade a Bear Flag Pattern
More and more people are choosing to day trade stocks rather than buying and holding for the long term. This article will explain how to use technical analysis to trade a bear flag pattern with success. It assumes the reader has basic knowledge of technical analysis and real time candlestick charts.
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First, it is key to spot the bear flag pattern to trade it accordingly. A bear flag will normally form after a rising trendline has been broken. The bear flag is a downside continuation pattern that can be spotted by parallel rising lines after a sharp drop. True to its name, it looks like an upside down flag on a candlestick chart. On the chart I have drawn the rising trendline in Yellow, and the flag pattern in Green. Notice the long candlestick (flagpole) followed by candlesticks that rise in a consolidation like pattern to make a flag.
After spotting a bear flag pattern, you will be looking to enter a short position as you expect the downside to continue. Wait until a candlestick closes outside of the flag pattern before entering your short position. On the chart, I have circled a candlestick in white that closed outside of the bear flag before the big drop in price came.
Like every other trade, nothing is 100% guaranteed so it is important to place a stop loss in order to avoid a big loss if the trade goes against you. I would recommend placing a stop loss just above the lower rising trendline of the bear flag pattern in case it breaks back into the flag and then continues higher.
Once your trade is entered and your stop loss is set, it's time to decide when and how much profit to take. Technical analysis makes this easy and takes the guesswork out of it. Calculate the length of the flagpole on the bear flag pattern and apply this to the point in which price broke out of the bear flag. The length of the flagpole is $.24 from $12.12 down to $11.88. The pattern played out perfectly as you would expect the price to drop $.24 and touch at least $11.65 as it did soon after price broke down out of the bear flag. On the chart, I have drawn another green line to indicate the target move of the pattern. Take your profit and begin searching for your next trade.
Equity Indices Bull Flag Patterns Breakout, More Upside Likely
So far in pre-market trading, the bull flag patterns that were discussed on Friday & in last night's market outlook video have broken to the upside. In addition to those flag patterns (best viewed on the 30 or 60-minute time frames), this inverse head & shoulders pattern (IHS) on the Nasdaq 100 futures was posted at 9:18pm ET in the trading room last night . So far, that IHS could not have played out any more perfectly: A breakout right where expected (after a brief pullback following the completion of the RS off the neckline), followed by a perfect backtest before prices moved impulsively higher. Let's see if we can now get one last thrust up to hit the measured target.
The first 30-minute QQQ chart below was posted on the front page of the site on Friday morning before the market open, showing a scenario with the Q's continuing to flag lower to the top of the Feb 16/17th gap before reversing & kicking off the "C" up in an ABC corrective pattern. That "C" up, which the markets appear to be in now following the breakout & rally in the futures overnight, measures to just under the 109 level, assuming perfect symmetry in the ABC pattern (which is also the same as the bull flag measured projection, i. e.- the length of the flagpole added to the lowest point in the bull flag). The net effect of a rally in equities has been and will likely continue to be bearish for gold (GLD) & especially the extremely overbought mining stocks (GDX) as the most recent sharp rally was largely driven by a flight-to-safety as equities were under heavy selling pressure.
@mrg5a I missed your question earlier & just saw the email notification of your comment while checking email for the first time today. The answer (obvious now but still have been) is yes, an entry at the open today with with stops somewhat below would have been objective although I lower stop & lower price target might have been my choice as I’m still skeptical about this bull flag pattern playing out all the way up the measured target around 108.60. Better to use a higher stop and then adding a relatively tight trailing stop as/if the Q’s approach the 104.75 area. For future reference, if you add “@rsotc” to a post, comment or reply in the trading room, I will receive a notification on the site when logged in which means that I can response more quickly to questions that might be time sensitive like this one. Sorry I missed it earlier.
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Bull Flag Patterns (Continuation Pattern) Forex Strategies Forex Resources Forex Tradingfree
Bull flag is a sharp, strong volume
rally on a positive fundamental
development, several days of
• Bull flag formations involve two distinct parts, a near vertical, high volume flag pole and a parallel, low volume consolidation comprised of four points and an upside breakout.
• The actual flag formation of a bull flag pattern must be less than 20 trading sessions in duration.
• Most flag patterns occur at the middle of the larger move higher for a stock.
• Upside breakouts often lead to small 2-3% rallies followed by an immediate test of the breakout level.
If the stock closes below this level (now support) for any reason the pattern becomes invalid.
Bulls flags are favored among technical traders because they almost always lead to large and predicable price moves. Like all continuation patterns. bull flags represent little more than a brief lull in a larger move higher. Indeed, in many cases the flag pattern will actually take shape in the middle of the ultimate move higher. Bull flags occur because stocks rarely move higher in a straight line for an extended period, instead, the move higher is broken up by brief periods where traders catch their breath.
The first part of the flag pattern is often called the flagpole or mast. During this phase the stock price skyrockets to a reaction high (a) on some positive fundamental development. Very often this will be the unveiling of a new product, a favorable legal resolution or positive earnings surprise but the change in price is near vertical as would be sellers are overwhelmed by new buyers caught-up in the euphoria of the moment. As the stock soars speculators that were smart enough to have purchased the stock at lower levels begin selling.
At this point the second phase or flag portion of the bull flag begins. Because the flow of news and investor sentiment is overwhelming positive, most of the stock sold by speculators is easily absorbed in the beginning but as time passes fewer investors seem willing to pay the current price. Slowly, the stock price begins to falter on dramatically reduced volume. The descent is slow because bullish sentiment is still very strong.
After several days of minor weakness, a rally begins and a minor low is set (b) . Sensing an opportune time to enter new positions buyers begin to return, pushing the stock very near the most recent high but because volume is light this rally is easily rebuffed and a slightly lower high (c) is established before the price turns
lower. The new round of selling sends the stock modestly lower on reduced volume. After several more sessions the stock moves below the lows made at point (a) but volume contracts further. Just as it begins to look as though a real decline is underway there is a new positive fundamental development and the stock begins to move higher (d) . As the rally accelerates volume increases dramatically, buyers overwhelm those taking profits. Over the next 1-2 sessions the stock moves through the high set at point (c) and volumesurges further. This triggers an upside breakout point (e) . The next session several Wall Street firms either make new buy recommendations or reiterate existing recommendations. The stock opens higher and goes on to make significant new highs in the weeks ahead.
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Forex Analysis: EUR/USD Flag Consolidation at Key Resistance
EUR/USD (daily chart) has again bumped up against important resistance around the key 1.3300 price region, a level that price has been unable to breakout above for the last 9 months. For 2 weeks since late December, price has consolidated right under this 1.3300 level, forming a flag-like pattern consolidation. This occurs within the context of both a longer-term bullish trend extending back to the July 1.2041 low, as well as a shorter-term bullish run that began three weeks ago and broke out above several key resistance levels. With price having formed the bull flag pattern under 1.3300, a breakout above this level could move towards further potential resistance to the upside around 1.3500, thereby confirming a continuation of the entrenched bullish trend. To the downside, short-term potential support resides around the 1.3170 price region, a prior support/resistance level as well as the approximate lower border of the flag pattern.
Forex trading involves a substantial risk of loss and is not suitable for all investors. FX Solutions LLC (“FXS”) is compensated through a portion of the bid/ask spread. This information is being provided only for general market commentary (based on technical analysis) and does not constitute investment trading advice. Certain information contained herein has been obtained from sources that FXS believes to be reliable; however, FXS cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is subject to change without notice. FXS has no obligation to update any or all of such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy or accept responsibility for errors. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision. El rendimiento pasado no es necesariamente indicativa de resultados futuros. No determination has been made regarding the appropriateness of any information contained herein. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated herein. FXS expressly disclaims any loss or profits that may arise from any use of the information contained in or derived from this commentary. FXS and its affiliates may engage in transactions that are inconsistent with the views expressed herein. FXS does not endorse nor is it responsible for any third-party posts related to this material.
sobre el autor
James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.
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Pattern Recognition
Chart Patterns - Double Tops & Double Bottoms
Double Tops & Double Bottoms Double Tops provide technical traders with an indication of a beginning downward trend. Double Tops occur when a new high is plotted, raising the resistance level. The price then retraces and declines, only to rise again and reach the same high or resistance level.
The psychology behind a double top is thought to work like this:
Traders around the globe push the price to a new high; because the new high is a tad extreme the price retraces.
Again traders push up to the same level, testing it just one more time; again the price feels too extreme.
The market has decided that an upwards trend is just not in the cards, twice a new high was tested and twice the market sold to push it back down.
After observing a Double Top, many traders assume that for the time being the market will move in a downwards trend, thus affording an opportunity to sell, or exit a soon to be falling long position.
Double Bottoms are just the opposite of Double Tops. Twice the market will test a new low, and twice the market will refuse the idea of pushing beyond that point. The buyers will rally and an uptrend will follow.
Pattern Recognition Systems can automatically identify and alert Forex traders of double tops and double bottoms patterns.
Chart Pattern - Triangles
There are three types of triangles that technical traders focus on:
Ascending Triangles
Ascending triangles are considered bullish Forex chart pattern formations, though depending on whether they are formed during an up-trend or a down-trend they may have different implications regarding future price movement. Spotted within an up-trend an ascending triangle is typically considered an indication that the upwards trend will continue. Just the opposite, if an ascending triangle forms during a downwards trend it is considered an indication of a trend reversal. Essentially, ascending triangles are comprised of a series of candles that form the shape of a triangle. The term ascending triangle refers to the fact that the triangle's two trend lines are not created equally; the top line of the triangle will represent a fairly even level of high prices, while the lower level of the triangle will represent a continued series of higher lows.
The consolidation between buyers and sellers at an upward slant suggests pressure from the buyers. The resistance line can typically only hold for so long before the buyers get the best of the sellers and the price breaks out in an upwards trend, at which point the resistance level often becomes the new support level. Figure 3 shows an example of an ascending triangle chart pattern.
Descending Triangles
Descending triangles are just the opposite of ascending triangles. In a downwards trend the triangle forms as an indication that the trend will continue downwards. In an upwards trend the triangle forms as an indication of a trend reversal. Descending triangles are formed when there is a series of progressively lower highs and relatively even lows. As can be seen in the image below the top line or resistance line of the triangle will be angled down, while the lower line or support level will appear as a level horizontal line.
Symmetrical Triangles
Symmetrical triangles are most often considered a continuation chart pattern. Symmetrical triangles can be seen as a series of lower highs and higher lows develop forming the shape of a triangle. This pattern represents a struggle between buyers and sellers, as is usually the case with price consolidation; more often than not symmetrical triangles precede a price breakout. Though it is generally safe to assume that symmetrical triangles will only present themselves as an indication that the current trend either upwards or downwards will continue, this may not always be the case.
Triangle patterns can automatically be identified by Pattern Recognition Systems and alert Forex traders as they emerge.
Chart Pattern - Wedges
Wedges are often considered a difficult Forex chart pattern to recognize, and or are often confused with triangles. The key to spotting the difference is found in the slant or the angle of the support or resistance line. When observing triangles notice that ascending triangles show a flat or even resistance line, conversely descending triangles show a flat or even support line. Symmetrical triangles, as their name suggests, are neither slanted downwards or upwards. Wedges on the other hand, are represented by support and resistance lines that both slant in the same direction, be it up or down.
There are two types of wedges: rising wedges and falling wedges.
Falling Wedges
Falling wedges are considered bullish Forex chart pattern formations. When found in a downwards trend the falling wedge suggests a reversal of the trend. When found in an upwards trend the falling wedge suggests a continuation of the upwards trend. The falling wedge is formed by a series of lower highs and lower lows. Notice that both the support and resistance levels of the wedge are slanted downwards, this is what sets this pattern apart from a triangle chart pattern. Prices within the falling wedge will continue to tighten until the resistance line is finally penetrated and the breakout upwards begins.
Rising Wedges
Rising wedges, the opposite of falling wedges, are considered bearish patterns and are represented by a series of continued higher highs and higher lows which are narrowing or consolidating. The rising wedge suggests that though the buyers are reaching new highs, these highs a progressively tighter and tighter. These progressively tighter highs indicate that the upwards trend is losing steam. A rising wedge found in an upwards trend would suggest a trend reversal and a rising wedge found in a downwards trend would suggest a short rally from the buyers, but ultimately a continuation of the downwards trend.
Pattern Recognition Systems can correctly identify and alert Forex traders of wedge patterns.
Chart Pattern - Flags & Pennants
Flags and pennants are perhaps the most common of continuation chart patterns. Spotting a flag or a pennant usually begins with noticing the flag pole, or the trend line. Flags and pennants typically form after a substantial trend up or down as an indication that the price is consolidating or being tested before continuing in the initial direction of the trend. Often the consolidation period (the flag or pennant) is slanted in a direction opposite of the initial trend, this demonstrates the Forex market's hesitation to continue upwards or downwards, but ultimately it is nothing more than a hesitation and an indication that the initial trend is continuing.
Though both flags and pennants indicate a continuation of the current trend, there is a distinct visual difference between the two. The flag is usually represented by a more rectangular consolidation period, ( view figure 7 ) meaning both support and resistance levels will be about an equal distance from one another. A pennant on the other hand will be represented by support and resistance levels that are moving towards one another in the shape of an asymmetrical triangle. Both the flag and the pennant are always spotted at the end of the flag pole, or at the end of a sharp directional trend.
A good Pattern Recognition System can automatically identify and alert Forex traders of flag and pennant patterns.
Chart Pattern - Head & Shoulders / Reverse Head & Shoulders
Head and shoulders are usually found after a long trend either up or down. Consisting of three peaks, one of which (the head) is centered and higher than the two lower and relatively equal peaks (the shoulders). Head and Shoulders is perhaps the most well known reversal patterns. Formed after a long upwards trend the left shoulder begins to form while still in the upwards trend. Essentially the left shoulder forms as prices rally up and quickly thereafter retrace, typically the upwards trend line, or resistance level will not be broken as this happens. Notice that when the left shoulder is seen alone, it can also be viewed as a forming flag. As the left shoulder completes, prices again rally, this time to a new high which will become the head of the chart pattern. After the high peak or head of the pattern is formed and prices have retraced back down, again prices will rally to near the same level as the left shoulder to form the right shoulder.
Essentially, within an upwards trend prices have attempted to rally three times and each rally has seen limited success, or in other words has been rejected by the sellers. Once the right shoulder breaks through the support line equal with the right shoulder (the neck line), the reversal of the trend has officially begun. Buyers have tried to continue the upwards trend, and three times have lost their battle to the sellers.
Reverse Head and Shoulders
Reverse head and shoulders represent essentially the same situation as normal head and shoulders, but of course are found in long term downwards trends as opposed to long term upwards trends. Instead of the head and shoulders represented by new peak highs they are represented by new peak lows. The reverse head and shoulders tips the trader that the downwards trend is losing steam as three new lows have been tested and each time bested by the buyers in the market.
Use our Pattern Recognition System from our Forex trading tools section to automatically detect and alert you to emerging head & shoulder patterns.
Фигуры продолжения тренда
Фигуры продолжения тренда сигнализируют об определенной паузе в развитии тренда, подразумевая, что на протяжении некоторого периода времени движение цены будет продолжаться в предыдущем направлении. Мы рассмотрим следующие модели: ценовой канал, симметричный треугольник и флаги и вымпелы.
Ценовой канал
Ценовой канал – это фигура продолжения, ограниченная трендовой линией и линией возврата. Ценовой канал может подниматься вверх (восходящий), опускаться вниз (нисходящий) или не быть ни восходящим, ни нисходящим (горизонтальный). В зависимости от направления уклона, каждая из линий может служить поддержкой или сопротивлением.
+ Восходящий ценовой канал считается бычьим. Трейдеры будут покупать, когда цены достигнут трендовой линии поддержки и получат прибыль, когда цены достигнут возвратной линии сопротивления.
+ Нисходящий ценовой канал считается медвежьим. Трейдеры поспешат продать, когда цены достигнут трендовой линии сопротивления и получат прибыль, когда цены достигнут возвратной линии поддержки.
+ Прямоугольная фигура является ни медвежьей ни бычьей, а только отражает паузу в текущем тренде.
Для того чтобы обозначить ценовой канал на повышение, необходимо иметь хотя бы два высоких минимума и две параллели или два высоких максимума. Соответственно, чтобы обозначить ценовой канал на понижение, необходимо иметь два низких максимума и параллель или два низких минимума.
Хотя ценовые каналы считаются фигурами продолжения, исключение составляет изменение тренда. В таких случаях цены падают, не достигая линии возврата, что может служить знаком неминуемого разворота.
Ценовые каналы также несут в себе количественные характеристики. Как только цена пробивает линию канала, она обычно может измениться в диапазоне, равном, по крайней мере, ширине канала.
Поскольку технический анализ можно в равной степени отнести как к творчеству, так и к науке, в нем существует широкий простор для применения. Если цена точно касается линии тренда несколько раз, такую линию можно назвать идеальной. Несмотря на это, каждый трейдер индивидуально определяет для себя точность и положение, как линии тренда, так и линии канала. Точно так же, если линия канала параллельна главной линии тренда, она является идеальной.
Симметричный треугольник
Симметричный треугольник – это фигура продолжения, разработанная на рынках, у которой отсутствует направление. Модель состоит из двух низких максимумов и двух высоких минимумов, которые, казалось бы, соединяются. Если продлить линию, соединяющую эти точки, получится форма симметричного треугольника.
На основе симметричного треугольника можно сделать заключения, как о времени изменения цены, так и о ее количественных значениях. Как только цена пробивает одну из границ треугольника, есть все основания полагать, что она измениться на величину, равную основе треугольника или даже еще большую (см. пример ниже). Что касается времени, прорыв треугольника должен состояться приблизительно в промежутке от половины до двух третьих расстояния от основы треугольника до его вершины.
Прорыв может произойти с обеих сторон треугольника. При симметричном треугольнике на восходящем рынке, прорыв происходит в направлении предыдущего восходящего тренда. При симметричном треугольнике на нисходящем рынке, прорыв происходит в направлении предыдущего нисходящего тренда.
Пример симметричного треугольника на восходящем рынке
Флаги и вымпелы
Эти две фигуры продолжения тренда похожи между собой и возникают обычно в средней точке движения цены. Флаг представляет собой прямоугольник с небольшим наклоном против тренда, а вымпел представляет собой треугольник.
Флаги и вымпелы похожи между собой как по форме, так и в интерпретации. Обе фигуры символизируют небольшую консолидацию в движении цены, хотя для того, чтобы их можно было однозначно определить как фигуры продолжения тренда, необходимо, чтобы они являлись подтверждением предыдущего тренда.
Как правило, флагам и вымпелам предшествуют резкие скачки или падения в направлении тренда, формирующие "флагшток" на графике. Прорыв из фигуры должен показать движение цены, равное, как минимум, длине флагштока.
Пример флага на восходящем рынке: При прорыве минимальное движение цен равняется длине флагштока.
The continuation patterns
Latihan Forex kami menyediakan kesemua maklumat tanpa ragu ragu untuk kejayaan kerja dalam pasaran Forex.
The continuation patterns
Flag as the model of continuation pattern is shown at the following illustration.
Flag is the movement of the price in certain range, that is shown by red dashed line on the illustration. The potential of the movement when the price leaves the channel has at least the same size as "flagpole".
Picture 11. "Flag" continuation pattern
Picture 12. "Pennon" continuation pattern
"Pennon" pattern is one of the individual cases of the flag pattern. It is formed in those cases when the support gradually increases, and the resistance gradually lowers. From the point of view of price dynamics the consolidation takes place. The break in the level of resistance, as a rule, leads to the formation of new current trend and the potential of this movement is no smaller than the size of the "flagpole".
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Forget about Forex Indicators and Do This
If you are a beginner Forex trader or just sick and tired of trying to figure out indicators and price action, this article may just be right for you.
This applies to trading Forex too.
Often, when I talk to aspiring Forex traders, they assume and believe that in order to outsmart the markets and profit big they need to have an over complicated strategy.
A strategy that has advanced calculations and confusing charting.
This is just unnecessary.
Don’t get me wrong, there are complicated strategies that do work, but you can easily trade simple strategies and win big.
Okay, okay, so what is this article about?
It’s about going back to the basics. Forget about candlestick trading, forget about indicators, forget about everything that’s confusing you.
Let’s talk about Chart Patterns
If you are having trouble winning, then try looking for chart patterns. And trade them. That’s all. Just in case you aren’t familiar with chart patterns…
Chart Patterns: Are formations on a trading chart that allows you to predict near future price movement.
Basically, all you have to do is identify these “patterns” or “formations” and you can easily predict what will come next with low risk and high reward.
Here’s what I’m going to do for you.
Below is a list of some of the most popular patterns to watch for. Try to find these patterns in your trading charts, and you’ll know exactly what to do next.
Pattern 1: Double Top / Double Bottom
With this pattern we are looking for a reversal of the trend. It can be a reversal of an up trend or down trend. Typically, we are looking for a support or resistance level that hits twice, hence a double top or double bottom.
As you can see in the images above, there is a resistance / support level, also known as a neckline. That line once broken is your chance to jump in with a BUY or SELL, which is the reverse of the trend from the very left side of the chart image shown.
The goal is to aim for the size of the top / bottom as your take profit, and stop loss would be a little below / above the neckline.
Pattern 2: Head and Shoulders
The head and shoulders pattern is one of the most reliable patterns. If you were to remember any one pattern, this is it.
This is similar to the double top / bottom, but there’s 3 tops / bottoms instead. And the middle top / bottom is taller than the 2 next to it.
Once the price action breaks through the neckline, you can enter the trade just like the first pattern we discussed.
Pattern 3: Triangles
Triangle patterns can be used for reversals and continuation of a trend. Simply draw the line of support and resistance as seen in the image above. For each triangle.
A triangle that is symmetrical can break out up or down. So a nice trick is to set a limit order for a buy above where it can break, and a sell limit below where it can break.
For the ascending and descending triangles, we are looking for a break at the support / resistance line that stays fairly strong and the price action keeps getting smaller and smaller staying closer and closer to the line, waiting to break it.
A limit order would work well here also.
Pattern 4: Flag And Pennant
The flag and pennant are continuation patterns, essentially, they are temporary pauses in the market, before the price continues in the direction it was before.
The flag basically looks like a flag, and will zigzag within a small range, then break out continuing up or down the way the market was going.
For the pennant, it’s very similar to the symmetrical triangle pattern and can almost be traded the same. But the difference is the pennant doesn’t need to test the support / resistance lines several times like the triangle does.
Another important precursor for the flag and pennant is a strong and sharp move in the price action before the patterns emerge.
There are other patterns to learn as well, but these are some of the best ones to learn and practice for now. You don’t want to overwhelm yourself.
I hope this helps you to become a better trader and don’t forget, trading is imperfect. The patterns will not be perfect, but do the best you can to identify them and trade with them.
If you haven’t had a chance to download my free custom indicator, it might also help you with your trading, check it out here:
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Entender claramente esto: La información contenida en este producto no es una invitación para intercambiar ninguna inversión específica. Negociación requiere arriesgar dinero en la búsqueda de ganancias futuras. Esa es tu decisión. No arriesgues dinero que no puedas perder. Este documento no tiene en cuenta sus circunstancias financieras y personales. Está destinado únicamente a fines educativos y NO como asesoramiento individualizado de inversión. No actúe en esto sin el consejo de su profesional de la inversión, que verificará qué es conveniente para sus necesidades y circunstancias particulares. La falta de buscar asesoramiento profesional detallado personalmente antes de actuar podría conducir a que usted actúe en contra de sus propios intereses y podría conducir a pérdidas de capital.
* REGLAMENTO DE LA CFTC 4.41 - LOS RESULTADOS DE RENDIMIENTO HIPOTÉTICOS O SIMULADOS TIENEN CIERTAS LIMITACIONES. DESCONOCIDO UN REGISTRO DE RENDIMIENTO REAL, LOS RESULTADOS SIMULADOS NO REPRESENTAN COMERCIO REAL. TAMBIÉN, DADO QUE LOS COMERCIOS NO HAN SIDO EJECUTADOS, LOS RESULTADOS PUEDEN TENER ALGUNO O ALGUNO COMPENSADO POR EL IMPACTO, SI CUALQUIERA, DE CIERTOS FACTORES DE MERCADO, COMO FALTA DE LIQUIDEZ. LOS PROGRAMAS DE COMERCIO SIMULADOS EN GENERAL ESTÁN SUJETOS AL FACTOR DE QUE SEAN DISEÑADOS CON EL BENEFICIO DE HINDSIGHT. NO SE HACE NINGUNA REPRESENTACIÓN QUE CUALQUIER CUENTA TENDRÁ O ES POSIBLE PARA LOGRAR GANANCIAS O PÉRDIDAS SIMILARES A LOS MOSTRADOS.
The Flag and Pennant Binary Options Trading Strategy
By Raul Canessa C.
The Flag and Pennant strategy for trading binary options is a chart-pattern based strategy, like most of the other such strategies out there. What sets it apart from the majority of these schemes though is the fact that the Flag and the Pennant pattern are rather difficult to spot, for beginners and advanced traders alike.
With that in mind, it’s safe to say that the actual identification of the above said patterns is one of the main goals and components of this strategy. How one can then use these patterns to trade is actually quite self-explanatory.
The first thing one has to understand about flags and pennants is that they’re continuation patterns. What that means is that their presence indicates a continuation of a previous trend in the same direction. The flags and pennants are therefore price-breaks, representing periods during which profit-taking occurs, before the trend resumes.
Technically speaking, there’s no difference between flag and pennant patterns. The trend lines traced at the highs and lows of the pattern are parallel in the case of flags, and they converge in the case of pennants, hence the names. There are bearish flags, which represent breaks in a downward trend, and bullish ones, which are essentially price-breaks in an upward trend.
Now that you know what flags and pennants are, it’s time to get down to identifying these rather ubiquitous yet so difficult-to-spot patterns.
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The key to identifying flags and pennants is to spot profit-taking on charts. Profit taking results in a short period of retracement, which will end up forming the flag or pennant part of the pattern. The flagpole is the actual trend before the retracement occurs. Once the trend lines are traced and the flag pattern is essentially drawn up, the trader has to watch for a break out of the pattern, which is the first indication of the resumption of the previous trend.
Traders who find it difficult or impossible to identify such trends can use pattern-recognition software to aid them in spotting the flags and pennants. There are all sorts of such programs out there, some of them available for free, others for a one-time fee or subscription.
When it comes to identifying patterns, one always has to keep in mind that there are usually certain errors associated with manual identification. Some of the pattern-identification programs available out there are so good that they completely eliminate these errors.
Now for the actual trade: the flag/pennant pattern strategy can be used for the Touch/No Touch as well as the Call/Put trades.
In order to best illustrate how the actual trades need to be placed, let’s consider a bullish flag pattern. Once the pattern is drawn up, it quite clearly defines the No Touch zone for the trade, which is below the pennant/flag. The breakout candle at the end of the flag pattern, which – as said above – marks the start of the resumption of the dominant trend, is the critical point in the strategy. Everything above that candle belongs to the Touch Zone, and that is where the Call trade should be placed as well.
Now then, for the trade expiry, one has to consider the actual time-frame used for the analysis. If it’s an hourly chart you’ve used, the expiry on the Call contract should be set to at least 6 hours, in order to give the trend plenty of time to accomplish what it’s set out to do.
Obviously, with bearish flags and pennants, only the Call contract can be traded (in addition to the Touch/No Touch trades of course). To trade the Put contract, one will need to find a bearish flag or pennant. Everything said above is valid for the Put trade, in reverse.
The bottom line: in capable hands, the flag/pennant approach is an efficient weapon indeed. Remember: the critical part is the actual identification of the pattern(s). Also: use a demo account to put your flag/pennant skills to the test before going for the real McCoy.
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Forex Chart Patterns | Technical Analysis Patterns
Trading chart patterns are one of the technical analysis methods. intended to define market turns and trends. With the help of a chart pattern it becomes easier to notice conditions where the market tends to break out. Due to those graphical formations it becomes possible to see whether the price is likely to continue its direction or go reverse.
An accurate analysis, no matter it is a forex analysis or analysis of any other market, implies usage of various tools, such as indicators. In the wide number of Forex chart patterns it becomes quite difficult to highlight any of them that are used more often by traders. However, the value and importance of these tools cannot be neglected, because they sometimes may help to see the biggest moves in the markets.
Thus, chart patterns do clue traders in on what may happen in the market and serve as a basis for developing trading strategies and deciding when to buy or sell an asset.
If you look at the chart with a strongly pronounced trend you can see places where the price has consolidated during its movements forming the same type of figures. These formations are trend continuation patterns which are often used by traders for making decisions. Trend continuation patterns are formed during the pause in the current market trends, and mark rather the movement continuation than its reversal. By contrast with the model of trend reversal. the figures are often formed at shorter time intervals.
Trend Reversal Patterns represent geometric models on the charts of currency rates which are formed after the price level has reached its maximum value in the current trend. These patterns serve to indicate that the ongoing trend is about to change the course and their recognition helps to identify the end of the trend and the beginning of a new movement. A notable feature of the recognition of these models is that the trader is informed not only about the imminent change in the trend, but also the possible value of price movement.
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Lesson 8: Strategies for Trading the Flag and Pennant Chart Patterns
In our last lesson we learned about the flag and pennant chart patterns. how to identify them on a chart, and when the pattern is a bullish or bearish sign. In this lesson we are going to learn how to identify entry and exit points for potential trades after spotting these patterns on a chart.
As we learned in our last lesson when you spot a flag pattern in an uptrend this is a bullish sign as the market consolidation which forms the flag is seen as a pause before a resumption of the original uptrend. As this is the case when traders spot these patterns on a chart they will commonly look to enter a buy position. The entry point which they will commonly use to enter the long position is the breakpoint of the upper line of the flag which is resistance. The target for the trade is then calculated by measuring the distance between the start of the up move and the highest point on the flag and then projecting that upwards. The stop is then placed just below the bottom support line of the flag.
Example of the Bull Flag Trading Strategy:
The strategy is exactly the same for the bull pennant, with one exception. When trading the bull pennant the stop loss is placed just below the bottom trend line, in line with the closest trough.
Example of the Bull Pennant Trading Strategy:
When you spot a flag pattern in a downtrend it is a bearish sign as the market consolidation which forms the pattern is seen as a pause before a continuation of the original downtrend. As this is the case when traders spot this pattern on a chart they will commonly look to enter a short position. The entry point that is normally used when trading this strategy is to sell on a break below the bottom support line. The target is then calculated by measuring the distance between the start of the down move and the lowest point on the flag and then projecting that downwards. The stop is then placed just above the upper resistance line of the flag.
Example of the Bear Flag Trading Strategy:
The strategy is exactly the same for a bear pennant, with one exception. When trading the bear pennant the stop loss is placed just above the upper trend line, in line with the closest peak.
Example of the Bear Pennant Trading Strategy:
So that completes this lesson. You should now have a good understanding of the strategies used to trade flag and pennant patterns as well as how to identify these patterns on a chart. In our next lesson we are going to look at the triangle chart pattern and how to spot this on a chart so we can look at ways to trade that continuation pattern. So we hope to see you in that lesson.
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Global-View. com also offers a forex blog . where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View. com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum . there are also Member Forums available for more in depth forex trading discussions.
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The continuation patterns
Tutorial Forex kami menyediakan semua informasi yang diperlukan untuk pekerjaan sukses di pasar Forex
The continuation patterns
Flag as the model of continuation pattern is shown at the following illustration.
Flag is the movement of the price in certain range, that is shown by red dashed line on the illustration. The potential of the movement when the price leaves the channel has at least the same size as "flagpole".
Picture 11. "Flag" continuation pattern
Picture 12. "Pennon" continuation pattern
"Pennon" pattern is one of the individual cases of the flag pattern. It is formed in those cases when the support gradually increases, and the resistance gradually lowers. From the point of view of price dynamics the consolidation takes place. The break in the level of resistance, as a rule, leads to the formation of new current trend and the potential of this movement is no smaller than the size of the "flagpole".
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Forex Analysis: AUD/USD Maintains Upside Bias in Bullish Price Pattern
April 4, 2017 – AUD/USD (daily chart) has formed a flag pattern within its two-month climb from extreme lows. Normally considered a trend continuation pattern, the flag formation is a small area of consolidation resembling an upright flag, which represents a resting point in the midst of a price advance. This bullish flag pattern has formed after the currency pair broke out above a major resistance area two weeks ago that included: the 200-day moving average, a key bearish trend line extending back to April 2017, and the neckline of a large inverted head-and-shoulders pattern.
That crucial breakout provided an indication of a potential bottoming out of the currency pair which, in turn, suggests further potential gains for AUD/USD. A breakout above the current flag formation points to a short-term upside target around 0.9400 resistance. Even further to the upside, the head-and-shoulders price target resides around the 0.9600 level. Key downside support for the pair currently resides around the broken head-and-shoulders neckline and the 200-day moving average.
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.
sobre el autor
James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.
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Continuation & Reversal FX Patterns
By Tyler Yell. Experto en comercio de divisas
Tyler Yell is a trader for his own account, Currency Analyst, & Trading Instructor for DailyFX. com which is the News & Analysis site for FXCM. com. Tyler teaches traders the best practices in trading while helping to them to recognize and act on trading opportunities as they arise due to economic or charting developments. Tyler has been asked to speak to college students, new traders and experienced traders from other markets to explain the complexities of the 5.3 Trillion in volume a day 24 hour a day, 5 days a week Foreign Exchange Market in a simple yet applicable manner. Lee mas
Updated April 28, 2017.
It's natural for traders to want to know when a trend has changed. A trend change is often associated with a new opportunity and a chance to be on the ground floor of a big move. However, the answer is one of the more elusive ones in the world of FX trading because the trend change is often noticed only after the fact. Today, we will look at different patterns that can help you see when a trend is continuing so that you know when your best bet is to stay in the direction of the larger trend or if a trend is reversing.
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Remember, a reversal type pattern is a statistically rare event and should not be your base scenario when analyzing charts.
Popular Patterns to be covered
When looking at price patterns. you can often find patterns that begin with only a handful of candles. On the other of the continuum you can find patterns that span out over days, weeks, or months. The shorter-term patterns that only involve a few candles are most commonly associated with price action analysis or Japanese candlesticks. For a definitive guide on Japanese candlesticks, check out Steve Neeson's Japanese candlestick charting method.
Continuation patterns are the bread and butter of many discretionary trend traders. The necessary ingredients for recognizing and treating these patterns is a mix of knowledge and patience.
Japanese candlesticks can be used alone but their effectiveness enhances greatly when you combine them with a tool like a moving average or a trend line. We will show you what methodologies you can add to Japanese candlesticks to increase their effectiveness in continuation patterns.
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tribal patterns are frustrating in the act but very hopeful for traders after they've already occurred. We'll discuss what types of triangles you may run into as well as how to trade them and the common pitfalls many traders fall into when coming upon triangles.
A sideways consolidation sounds simple and clean but that's not always the case. There are often times where a new high or the prior price range extreme is exceeded only to see a new relative low develop a few short days after. For this reason these should be combined with the prior articles on price range extremes to find when they have expired and when a trading opportunity is present.
Flag patterns are very popular and very easy to recognize in trade. We will discuss where in a trend a flight pattern often develops and what the pattern often indicates about crowd psychology in the markets.
it would be difficult to mention enough times that reversal patterns are statistically rare and should not be the base case scenario when you see one developing on the charts.
Head and Shoulders
a head and shoulders pattern is one of the first chart patterns that many traders learn. You'll learn not only their namesakes but what the pattern implies. In my experience, the reversal is rarely as significant as many traders expect or hope.
Similar to continuation Japanese candlestick patterns, the reversal candlestick patterns can be very helpful in their effectiveness can be increased with the use of other tools. You will be introduced to the tools and the reversal patterns worth trading.
Similar to the head and shoulders pattern, a double top is one of the first patterns introduced many traders. There are times when I double top will lead to a more extensive reversal but those events are rare and we will discuss what you should look out for after you believe a double top is taking place.
Confirming the trend change
Whenever a reversal pattern is believed to be in play, you should have ways to confirm the trend change. We will use three tools to help us identify and confirm a trend change so that you know when a higher probability reversal is playing out presenting you with an opportunity to trade.
Bearish Pennant Chart Pattern Forex Trading Strategy
The Bearish Pennant Chart Pattern Forex Trading Strategy is a trading strategy that is based on the bearish pennant chart pattern.
The Bearish Pennant Chart Pattern ForexTrading Strategy only requires you to be familiar with how to draw trendlines & secondly, be able to spot the Bearish Pennant Chart Formation when its happening.
THE BEARISH PENNANT CHART PATTERN
Here’s what a Bearish Pennant forex chart pattern looks like:
Notice how it is the exact opposite of the Bullish Pennant Pattern?
Notice that Pennant Chart Patterns (bullish or bearish) are different from the Flag Chart Patterns (either bullish or bearish)
with the bearish pennant pattern, you should have a market already in an existing downtrend.
at some stage, this downward trend will pause & consolidate for some time until a breakout happens.
The breakout usually happens to the downside.
with the Bearish Pennant Forex Strategy, we will be entering short orders (sell orders) when the breakout happens to the downside.
HOW TO SPOT THE BEARISH PENNANT CHART PATTERN FORMING
First, there has to be an existing downtrend.
Next, watch for price to pause and slow down and consolidate.
You need to draw 2 converging trendlines: one connecting the decreasing peaks (the downward trendline) and the other trendline connecting the increasing bottoms(upward trendline).
wait and watch for price to break the upward trendline which was drawn connecting the increasing bottoms (or swing lows).
Ahi tienes.
You have to be careful though. Sometimes, the peaks and bottoms may not be so clear when this bearish pennant chart is forming.
TRADING RULES OF THE BEARISH PENNANT CHART PATTERN FOREX TRADING STRATEGY
watch and wait for the upward trendline to be intersected.
the intersecting candlestick MUST close below the upward trendline.
then place a sell stop order 3-5 pips below the low of the intersecting candlestick
then place your stop loss order anywhere from 5-10 pips above the high of the intersecting candestick.
if that intersecting candestick is a true breakout, price will fall and activate your sell stop order.
For take profit targets, you have a couple of options:
set your take profit level at the price level where your profit will be 3 times what you risked.
or you can use a previous swing low point (bottom) to set your take profit target level.
So there you have it, the Bearish Pennant Chart Pattern Forex Trading Strategy. Don’t forget to share and tweet if you’ve enjoyed this.
Chart patterns in Forex 18.12.2017
The whole Forex technical analysis is based on the assertion that history repeats itself in the market; therefore, the trader periodically is actually watching the same type of similar events of trading situations. The pattern is a chart figure, allowing us to predict with high probability the future price movement in the market. In this article, we will focus on the most popular, reliable and relevant patterns in Forex.
Patterns can be divided into two categories: continuation patterns, and reversal ones. The first group includes those which confirm the continuation of the trend, while the second indicates the possibility of a market reversal.
Here are the most common patterns that you may find on the chart:
Gap is a chart pattern which occurs when there is an instant of a sharp change. In practice, it looks like a sharp jump in prices on the chart, which is formed as a result of a large gap between the levels of closing one period and opening the next. It can also look like a missing signal.
The simplest reason for the appearance of gaps is the misses in the data stream. It is understood that this should not mean anything for you.
The second case, of course - is more important. When a break occurs in a continuous stream of quotations (often after fundamental events), it is a signal of a sharp change in market conditions. If the opening of a new period held far above the previous closing, the gap shows a tendency to rapid growth of quotations. After the break-up usually occurs significant increase in prices. If the opening of a new period held substantially below the previous closing, it indicates a downward tendency.
Sometimes gaps in Forex can appear during holidays, on the eve or after important economic news, or in the last day of the month or year.
Head and Shoulders
This is one of the most popular and reliable chart patterns in technical analysis. Head and shoulders is a reversal chart pattern that when formed, signals that the security is likely to move against the previous trend. In this case, you will see in the graph a shape consisting of three peaks. Middle peak is the highest, and that it is considered the head, and the other two highs are the shoulders. When a trader sees the formation of the second arm, he is preparing for the opening of the transaction, as there sharply increases the probability of price movement.
You will note that the middle part of the figure is higher than the shoulders, which are roughly equal in height. Through the base of the head, marked in blue, there is the level of support, which will play a major role in the trade. The figure is formed gradually and becomes recognizable, perhaps, when the second arm is formed. At this time is already happening market price rebound from the support level formed by the first base of the head. The ideal shape of shoulders should be aligned and symmetrical, but in reality the right shoulder may be slightly higher or lower than left one.
Double tops and double bottoms
Double top is a reversal pattern (which means the trend is changed when the pattern is formed) that is formed on the top of an uptrend. It is formed when the price gets to a strong resistance level and cannot break it. The price rolls down for a while, but then it comes back to test this level. If the price pulls back from the resistance level again, then we have this pattern formed.
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Bullish Pennant and Bullish Flags You Might Also Like. Trading forex on margin carries a high level of risk, and may not be suitable for all investors. Flags and pennants are short-term congestion patterns that form in trends and are reliable continuation signals. The pennant graphical price model is a minor, short-term, trend continuation pattern that shows the previous direction will prevail in the future after its formation.
A pennant more than 12 weeks old would turn into a symmetrical triangle. break lends credence to the validity of the formation and the likelihood of continuation. Weekly Forex Forecast 25-29 March 2017 on EURUSD, rules-based graphic strategies forex this site Recommended Brokerage Forex with MetaTrader 4 Brief analysis of the. Learn how forex traders use the bearish and bullish pennant chart patterns to trade breakouts.
Today we look at another important and quite often appearing on the charts forex currency pairs figure charting - pattern Pennant bullish and bearish, as Learn Forex - Bullish and bearish pennant formation Trade It Simple. Subscribe Subscribed Unsubscribe 948. Subscription preferences Loading.
Website focused in Forex education which contains information about the Forex. When you conclude that there is a pennant formation pattern in a price chart. Free indicator Forex signal, Forex indicator free download, Best indicators free download, Best MT4 indicators.
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3.16 Difference between Pennants and Symmetrical Triangle patterns
Yes you got that right! A symmetrical triangle can be considered as only the flag while a pennant is the flag with the pole. The pole here is a large candle on the candle stick chart just before the pennant starts forming. The height of this candle is much bigger than the wide side of the pennant.
Considering the above a major difference between two is that in case of a pennant the sentiments about the ongoing trend suddenly becomes very strong before a slight pause. This makes a pennant a more reliable continuation pattern than a symmetrical triangle.
Difference in trading the Pennants and Symmetrical Triangles
Pennants
It's much easier to predict the breakout direction in case of pennant pattern as a pennant is generally a continuation pattern. In case a pennant pattern emerges during an uptrend, the breakout is normally on upside so that the uptrend continues and in case of downtrend a downward breakout takes place.
Symmetrical Triangles
Though symmetrical triangles are also considered as continuation patterns but practically a breakout can take place on either side and hence it is better to be prepared to take a position either way.
Patterns are repetitive configurations of bars/candles that often accompany changes in trend or predict its future behavior. Candlestick patterns consist of several candles, while classic patterns are vast formations that take at least several weeks to develop.
TOS Charts can help you indentify those patterns. For more informations on pattern types supported by the application, refer to corrresponding sections:
La volatilidad del mercado, el volumen y la disponibilidad del sistema pueden retrasar el acceso a la cuenta y las ejecuciones comerciales.
El desempeño pasado de una seguridad o estrategia no es garantía de resultados futuros o de éxito en la inversión.
Las opciones no son adecuadas para todos los inversores, ya que los riesgos especiales inherentes al comercio de opciones pueden exponer a los inversores a pérdidas potencialmente rápidas y sustanciales. Antes de las opciones de negociación, debe leer atentamente las características y los riesgos de las opciones estandarizadas.
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Double Top at AAPL, Wedge at AMAT, Flag at OIL
A possible Double Top pattern has appeared at the daily chart of Apple stock (AAPL). Price has stopped twice on the round Resistance level of 208.00, unable to break it. The Double Top is a strong reversal pattern that leads to reversal of the trend. Neckline is located at the Support level of 185, another round and strong psychological level. The level of 185 has been tested for 3 times and proven as strong level with high influence in this stock.
Despite these signs, the bullish trend is strong so an aggressive short at this point is risky. Short trade will be entered when price breaks the neckline of 185. Conservative traders would wait for a pullback to ensure a stronger entry.
Target is calculated via the measure rule:
A Wedge pattern has appeared at the Applied Materials stock (AMAT). Despite its appearance which sometimes confuses traders, the Wedge pattern is a reversal patterns that leads to a change in trend. It consists of two expanding trendlines that serve as support and resistance, until price breaks upwards and continues the uptrend.
The idea behind the Wedge pattern is of a retracement. After a strong uptrend, price begins to retrace, to gain fuel to continue the uptrend. This is shown by a weak momentum – note that slow movement of price in relation to the strong and quick uptrend.
Another technical item that supports the idea of the retracement is Fibonacci. We can see that price has touched exactly the 50.0 Fibonacci Retracement which is a bullish signal. Combined with the Wedge pattern, they form a good bullish signal.
A continuation is about to take place at the OIL. At least that what is shown by the Flag chart pattern which is now present at the Daily chart of this commodity. The Flag pattern is similar to a channel pattern but it is tighter and relatively small compared to the uptrend that led to it. It is a strong continuation pattern that leads to a bullish continuation in 81% probability.
It is expected, however, that OIL breaks the Resistance and continues its uptrend.
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How to Trade Flags
This Weeks Watch list is packed with great setups. So much so that I am going to skip the review video and go over how I trade Flags in the HPS system. This week's video has 3 Best Bets that all come from the same sector..Can you say sector rotation. Well would like to see that this next week and that could also be a safety sector that might find some interest if the market pulls back some soon. But I am not calling for a top and will just see how things look early Monday morning. Markets still will be focused on headline risk. I like the gradual scale in on the SPXU but not very small increments.
This next part is a small piece of the HPS methodology section: How I trade Flags.
Flags and Pennants: Whats great about flags? Well for one thing they are everywhere and on every time frame. I actually have a technique on the 1 minute chart that is up close to 85% success rate when it appears. This you will find on the futures HPS section. Flags also usually consist of multiple indicators that I use in the HPS. It is a great pattern but just like everything else you need to have converging indicators line up at the same time.
Flags and Pennants are short-term continuation patterns that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy volume and mark a mid-point of the move.
My # 1 Setup when trading a flag is that I want the stochastics to be oversold and at that time the price to be above the 20 ema or 50 ema. This is a guide for me and not a hard set rule. I mostly look for this set up on the daily time frame. In some cases the price will chop around the 20-50 ema so you don’t want to be so exact that you miss some great opportunities. Lots of times you will see the price drop below the 20-50 ema just to see it close back above it by the end of the day.
1. Trend is intact, we are pulling back but holding above the previous pivot low.
2. Stochastics making a fast rotation back to oversold levels <20 as the price makes a very organized pullback but hold above the 20-50ema
3. Flags like any pattern have a unique look to them. Basically they are mini channels that should be traded like any other channel (Channel Lesson) “Make sure it looks like a flag”
This combination has had high probability of success. In My experience it works over 70% of the time. That would increase depending on other convergences at that time. (Trend Lines, Reversal candles, ect)
Flags are continuation patterns and usually show up multiple times in a row, but it is important to identify them early in the trend so you can profit form them.
Here are some examples of my Trade-able Flag Setup
Lets start with the Daily Time frame:
Now lets break down how to trade the flag
Breaking down the daily time frame into a 60 min time frame shows you a great entry technique called the “Daily 60 Stochastic Combo” which is a multiple time frame trigger when both the 60min stochastics oscillator get oversold at the same time the daily stochastics are oversold.
Because the daily is a slow moving time frame the combo doesn’t happen every day but when it does it should be considered.
The Next chart is the same flags that we had on the daily now broken down to the 60 min time frame. You can see the channel much more in detail and the much quicker rotation of the stochastics.
This above technique as with any setup is dependent on market conditions. Flags are great in a trending market but trends can be defined and spotted in any time frame. You can have a trend develop on the 5 min time frame or a 1 min time frame. So understand your time frame and what to expect from it. The 60min daily combination is great for swing trades but also because the 60min is a trigger could be a great scalp also.
You can trade the 60 min flag by itself you don’t have to always wait for the combo to setup. I will go over the 60-15-5 combo in the next section.
Have a great weekend Everyone
The Common Forex Candlestick Patterns that You Need to Know
Common Candlestick Patterns
In the previous chapter, we covered the Japanese candlestick. now it’s time to demonstrate how some simple candlestick patterns can be the catalysts for some explosive moves in the market. When identified correctly, these chart patterns can help traders spot potential market tops or bottoms, and even can signal traders into potential breakouts before they actually happen.
In this chapter we will talk about the most common candlestick patterns that most traders will recognise and incorporate into their technical analysis…
The Double Top
Double top candlestick patterns form after a strong price rally or strong bullish conditions. It is easily identifiable because the double top pattern looks like two mountain peaks that form an ‘M’ shape on the chart.
The two peaks will generally be reacting with some strong resistance in the market, demonstrating that the bulls can’t penetrate that level. The initial bullish wave hits the resistance and bounces straight off it, finding support after a market retracement.
Bulls eventually pick up steam again to push the market back into higher prices where the market retests the resistance level. The bulls don’t have enough strength to break through the resistance, and price bounces straight off it again, creating the second peak.
A double top pattern is a classic sign of bullish exhaustion. The double top candlestick pattern generally signals the market is about to tip over. The containment line for the double top candlestick pattern is called the ‘neckline’, and this is where the market found support after the first peak.
The standard way to trade a double top candlestick pattern is to wait for the second peak to form and then short price breaks below the neckline. But as the saying goes, “there is more than one way to skin a cat”.
Here is an example of a real double top pattern…
,
The double top candlestick pattern is great for identifying bullish exhaustion and market tops. You can see on the chart above, after a long really this market double topped and broke the neckline, which resulted in a very profitable bearish trade.
The Double Bottom
The double bottom candlestick pattern is really the exact inverse of the double top pattern. It forms after strong bearish moves and has a ‘W’ type shape to it.
A double bottom signals bearish exhaustion and is formed when the bulls start to take control at a specific support level. The bears drive prices down into this support level where the bulls step in and drive prices back higher, this bullish rejection of support creates the first ‘V’ shape trough.
The market finds resistance and the bears attempt to drive prices back down. When the market reaches the support level for a second time the bulls step back in again, driving prices higher creating another ‘V’ rejection shape trough. This final move completes the double bottom candlestick pattern.
The resistance found after the first trough is referenced as the ‘neck line’. When prices push higher through the neckline, the double bottom pattern is completed and triggered.
Take a look at this example of a double bottom…
You can see how the market found a support level which the bears just could not punch through. The bulls held their ground here creating the double bounce, then the final push higher.
Long positions are generally triggered once price breaches the highs of the neckline, after the second bounce off support, but as we said before, there are multiple strategies to tackle double tops and bottoms. Just don’t get caught up chasing price. have a clear action plan in place.
Double bottoms are great indicators of bearish exhaustion and generally signal the end of bearish trends. Double tops and bottoms are much more powerful when played on the larger timeframes.
Head and shoulders
Head and shoulders are another market exhaustion candlestick pattern. This pattern is most reliable forming after the market has been already been trending in a certain direction for a while.
Let’s take a look at a basic head and shoulders candlestick pattern anatomy that forms on top of a bullish move.
As the name suggests, the candlestick pattern consist of a head and two shoulders. Normal head and shoulder patterns form on top of bullish trends, and just like the double top they signal bullish exhaustion.
The pattern is created when the bulls find a solid resistance level, retrace back and find support which creates the left shoulder. At this stage it’s impossible to tell if a head and shoulders candlestick pattern is forming.
When bulls pick up strength again and fire price upwards punching straight though the last tested resistance, however these higher prices can’t be maintained and price collapses back down under resistance as the result of a false break. It’s the false break that creates the ‘head’ part of the candlestick pattern.
After the bulls failed to maintain prices above resistance, they muster their strength and try again. Resistance holds and price falls back to support. This last phase creates the right shoulder and completes the head and shoulders pattern.
The containment line which has been acting as support during the whole process is called the neckline. The traditional way to trade the head and shoulders pattern is to go short when the market breaches the neckline after the signal has formed.
Check out a head and shoulders pattern that formed on a real chart…
You can see how this head and shoulders candlestick pattern demonstrated the exhaustion of the bulls. When the neckline was breached, this market aggressively sold off. Also note how the head and shoulders pattern formed after a strong bullish move.
The Inverse Head and Shoulders
The normal head and shoulders candle pattern signals and communicates bullish exhaustion. If you flip the pattern upside down you get the ‘inverted head and shoulders’ and this inverted pattern signals bearish exhaustion by operating in reverse.
After strong bearish activity; the market runs into support, retraces and finds resistance which creates first phase creates the left shoulder. It’s impossible to tell if the inverted head and shoulders pattern is forming at this point in time.
The bears push the market down; causing a false break, or breakout trap below the recently tested support. When price shoots back up above support it creates the ‘head’ section of the pattern.
The bulls retest the support level. Support holds and price bounces back to the resistive containment line, which is actually the neckline in this candlestick pattern. This also completes the inverted head and shoulder pattern. The classic way to trade this is by waiting for the market to push above the neckline, this triggers long trades.
You can see in the above example how the inverted head and shoulder candlestick pattern demonstrated bearish exhaustion and when the bulls broke the neckline containment, it produced a profitable trade.
Ascending Triangles
Ascending triangles form when the market runs into a resistance level and stalls market movement. Bullish pressure is still strong and continues to build up underneath, compressing prices tighter and tighter with each attempted bounce of resistance.
Generally what happens is the bulls eventually build up enough strength and punch through the resistance level just like in the example shown above.
Importante. In some cases the bulls can be exhausted during the formation of the ascending triangle, resistance holds and the market can collapse.
Descending Triangles
The inverse of the ascending triangle, heavy bearish pressure jams into a strong support level in the market. The increasing bearish pressure rejects bullish moves off the support level and compresses price tighter each time.
In the chart above you can see a real example of a descending triangle candlestick pattern. The bearish pressure eventually overwhelmed the support line and produced a profitable short trade.
Importante. This isn’t always the case; the bears can be exhausted while attempting to break the support level. When the bears are out of steam, the bulls have no resistance and bullish breakouts can occur.
Wedges
Wedges form when the market stalls in a period of indecision and starts producing higher lows and lower highs consistently. Eventually this HL LH patterns compresses price into the tip of the wedge that inevitably leads to a breakout.
Once price reaches the tip of the wedge, there is a high chance a breakout will occur. Wedges are bilateral, that means they can breakout in either direction. So the classic way to trade wedge breaks is to buy breakouts out the top of the wedge and sell price breakdowns below the wedge.
In the examples shown above, we can see once price was compressed into the wedge tip price broke out either the top or bottom of the wedge pattern. If we traded in the direction of the breakout here we would have caught some nice moves.
Flags
Flags form when the market retraces during trending conditions and are used as trend continuation patterns. The counter trend movement creates a small channel, when price breaks the channel in the direction of the trend, the continuation trade is triggered.
Using Chart Patterns with Price Action
Trading chart patterns like the ones discussed in this chapter can be profitable, but we like to combine our price action signals with these charts patterns to add confluence to our trades, creating higher probability trade setups.
In the example above, the chart had formed a double top pattern. A bearish pin bar signal was communicating future bearish price action right on the neckline support.
After price had broken the neckline, the market retested the neckline support as new resistance and produced a breakout trap & reverse trade. The double top reinforced our trade setups and our bearish bias.
The chart above demonstrates how an Inside Bar breakout signal got us into the wedge pattern breakout. Because of the Inside day price action signal, we were able to trade this wedge pattern with a tighter stop and produce a higher risk/reward trade.
To learn about our price action signals and how to combine them with chart patterns, check out our advanced Price Action Trading Course .
In the next chapter of our beginners course. We will be looking at some of the price action signals we use to trade.
May 6, 2017 TheForexGuy
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The continuation patterns
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The continuation patterns
Flag as the model of continuation pattern is shown at the following illustration.
Flag is the movement of the price in certain range, that is shown by red dashed line on the illustration. The potential of the movement when the price leaves the channel has at least the same size as "flagpole".
Picture 11. "Flag" continuation pattern
Picture 12. "Pennon" continuation pattern
"Pennon" pattern is one of the individual cases of the flag pattern. It is formed in those cases when the support gradually increases, and the resistance gradually lowers. From the point of view of price dynamics the consolidation takes place. The break in the level of resistance, as a rule, leads to the formation of new current trend and the potential of this movement is no smaller than the size of the "flagpole".
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Continuation Patterns
Continuation patterns indicate a pause in trend, implying that the previous direction will resume after a period of time. We will look at the following patterns: price channels, symmetrical triangles and flags & pennants.
Canales de precios
A price channel is a continuation pattern that is bound by a trend line and a return line. A price channel may slope up (ascending pattern), down (descending pattern) or not at all (rectangle pattern). Depending on the channel slope, each of the lines can serve as either support or resistance.
+ An ascending price channel is considered bullish. Traders will look to buy when prices reach the trend line support and take profit when it reaches the return line resistance.
+ Descending price channel is considered bearish. Traders will look to sell when prices reach the trend line resistance and take profit when it reaches the return line support.
+ Rectangle patterns are neither bullish nor bearish, but simply reflect a pause in the underlying trend.
To draw a bullish price channel it is necessary to have at least two higher-lows and two parallel, or higher-highs. Conversely, to draw a bearish price channel, two lower-highs and parallel, or lower-lows are necessary.
Although channels are usually referred to as continuation patterns, there are exceptions when a reversal trend might occur. In those cases prices usually fail to touch the return line before falling in what can be an early sign for an impending reversal.
Channels also have quantitative implications. Once price action breaks through the channel line, prices usually travel a distance equal to at least the width of the channel.
Because technical analysis is just as much art as it is science, there is room for flexibility. Even though exact trendline touches are ideal it is up to each individual to judge the relevance and placement of both the main trendline and the channel line. By the same token, a channel line that is exactly parallel to the main trendline is ideal.
Symmetrical Triangle
The symmetrical triangle is a continuation pattern that developed in markets that seems aimless in direction. The pattern contains at least two lower-highs and two higher-lows that seem to come together. When the lines connecting these points are extended, they converge and a symmetrical triangle results.
The symmetrical triangle has both measuring and timing implications. As the pattern is completed, price and volume diminishes before they both react sharply to break out of the triangle’s boundaries. When the breakout occurs, prices tend to travel a distance equal to the triangle’s base or more (see the example below). From the timing perspective, the breach of a triangle should occur somewhere between half-way and two thirds along the distance from base to apex, i. e. the triangle’s height.
The break may occur on either side out of the triangle. In the case of a bullish symmetrical triangle, the breakout occurs in the same direction of the previous bullish trend. In the case of a bearish symmetrical triangle, the breakout occurs in the same direction of the previous bearish trend.
Example of a bullish symmetrical triangle
Flags and Pennants
These two similar continuation patterns usually occur at the midpoint of a large price movement and represent only brief pauses in a dynamic market. They can be identified and distinguished by the shape of their “body;” a rectangle sloping slightly against the trend in the case of the flag, and a triangle in the case of the pennant.
Flags and pennants are similar in both their form and interpretation. Both mark a small consolidation of a price movement, though to be truly considered as continuation patterns there should be evidence of a prior trend.
Flags and pennants are usually preceded by a sharp advance or decline in the direction of the trend, which provides the shape of the “flagpole” En la tabla. The breakout from the pattern should show a minimal price move equal to the length of the flagpole.
Example of a Bullish Flag. When a breakout occurs, the minimal price move is equal to the size of the flagpole.
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Identifying chart patterns is simply a system for predicting stock market trends and turns!
Hundreds of years of price charts have shown that prices tend to move in trends. (I’m sure we’ve all heard the saying, ‘the trend is your friend’.) Well, a trend is merely an indicator of an imbalance in the supply and demand. These changes can usually be seen by market action through changes in price. These price changes often form meaningful chart patterns that can act as signals in trying to determine possible future trend developments.
Research has proven that some patterns have high forecasting probabilities. These patterns include: The Cup & Handle, Flat Base, Ascending and Descending Triangles, Parabolic Curves, Symmetrical Triangles, Wedges, Flags and Pennants, Channels and the Head and Shoulders Patterns. In my opinion, these are some of the best patterns to trade.
This section is designed to introduce you to some of these chart patterns, as well as teach you to identify repetitions in the market qualities, to make timely and more accurate decisions when predicting market trends.
The Cup & Handle Pattern
The Cup & Handle is the corrective action after a powerful stock advance. Generally a stock will have a powerful move of some 2 to 4 months, then go through a market correction. The stock will sell off into the correction in a downward fashion for maybe 20 to 35 percent off the old high point. The time factor is generally anywhere from 8 to 12 weeks depending on the overall market condition. As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price drift in a sideways fashion with a bias to the downside for about 4 days to 3 weeks. The handle is generally about 5% below the old high point. A handle that is any lower is generally a defective stock and contains higher risk for failure. The time to buy the stock, is as it emerges into new highs at the top of the handle and not the old high point set some 8 to 12 weeks ago. I have found some of the biggest stock market winners have this very powerful formation. It is one of the best and most reliable formations to look for. However, it is important to note that the best stocks with this formation are found at the beginning of a market move after a good market correction, and not during, or at the end of a major market advance.
The Flat Base Pattern
The Flat Base is a stock pattern that goes horizontal for any length of time. Very powerful advances can be had from this formation. What we look for is volume drying up as the stock stays at or about the same level going horizontally. Draw a trend line across the top of this formation. As the stock proceeds through the trend line, the stock is bought as it breaks the trend line and volume increases.
The Ascending Triangle Pattern
The Ascending Triangle is a variation of the symmetrical triangle. Ascending triangles are generally considered bullish and are most reliable when found in an up-trend. The top part of the triangle appears flat, while the bottom part of the triangle has an upward slant. Hear is a Typical Ascending Triangle Pattern
In ascending triangles, the stock becomes overbought and prices are turned back.
Buying then re-enters the market and prices soon reach their old highs, where they are once again turned back.
Buying then resurfaces, although at a higher level than before.
Prices eventually break through the old highs and are propelled even higher as new buying comes in.
As in the case of the symmetrical triangle, the breakout is generally accompanied by a marked increase in volume.
The Parabolic Curve Pattern
The Parabolic Curve is probably one of the most highly prized and sought after pattern. This pattern can yield you the biggest and quickest return in the shortest possible time. Generally you will find a few of these patterns at or near the end of a major market advance. The pattern is the end result of multiple base formation breaks.
The Wedge Formation Pattern
The Wedge Formation is also similar to a symmetrical triangle in appearance, in that they have converging trendlines that come together at an apex. However, wedges are distinguished by a noticeable slant, either to the upside or to the downside. As with triangles, volume should diminish during its formation and increase on its resolve. The Following is a Typical Wedge Formation Trend Pattern
A falling wedge is generally considered bullish and is usually found in up-trends. But it can also be found in downtrends as well. The implication however is still generally bullish. This pattern is marked by a series of lower tops and lower bottoms.
A rising wedge is generally considered bearish and is usually found in downtrends. They can be found in uptrends too, but would still generally be regarded as bearish. Rising wedges put in a series of higher tops and higher bottoms.
Channel Pattern
Channel Patterns should generally be considered as a continuation patterns. They are indecision areas that are usually resolved in the direction of the trend. Research has shown that this is true far more often than not, of course, the trendlines run parallel in a rectangle. Supply and demand seems evenly balanced at the moment. Buyers and sellers also seem equally matched. The same ‘highs’ are constantly tested, as are the same ‘lows’. The stock vacillates between two clearly set parameters. While volume doesn’t seem to suffer like it does in other patterns, there usually is a lessening of activity within the pattern. But like the others, volume should noticeably increase on the breakout.
Symmetrical Triangle Pattern
Symmetrical Triangles can be characterized as areas of indecision. A market pauses and future direction is questioned. Typically, the forces of supply and demand at that moment are considered nearly equal. The Following is a Typical Symmetrical Triangle Pattern
Attempts to push higher are quickly met by selling, while dips are seen as bargains.
Each new lower top and higher bottom becomes more shallow than the last, taking on the shape of a sideways triangle. (It’s interesting to note that there is a tendency for volume to diminish during this period.)
Eventually, this indecision is met with resolve and usually explodes out of this formation (often on heavy volume.) Research has shown that symmetrical triangles overwhelmingly resolve themselves in the direction of the trend. With this in mind, symmetrical triangles (in my opinion) are great patterns to use and should be traded as continuation patterns.
The Descending Triangle Pattern
The Descending Triangle, also a variation of the symmetrical triangle, is generally considered to be bearish and is usually found in downtrends. Unlike the ascending triangle, this time the bottom part of the triangle appears flat. The top part of the triangle has a downward slant. Prices drop to a point where they are oversold. Tentative buying comes in at the lows, and prices perk up. The higher price however attracts more sellers and prices re-test the old lows. Buyers then once again tentatively re-enter the market. The better prices though, once again attract even more selling. Sellers are now in control and push through the old lows of this pattern, while the previous buyer’s rush to dump their positions. Like the symmetrical triangle and the ascending triangle, volume tends to diminish during the formation of the pattern with an increase in volume on its resolve.
Flags and Pennant Pattern
Flags and Pennants can be categorized as continuation patterns. They usually represent only brief pauses in a dynamic stock. They are typically seen right after a big, quick move. The stock then usually takes off again in the same direction. Research has shown that these patterns are some of the most reliable continuation patterns. Here is a Typical Flags and Pennants Pattern
Bullish flags are characterized by lower tops and lower bottoms, with the pattern slanting against the trend. But unlike wedges, their trendlines run parallel.
Bearish flags are comprised of higher tops and higher bottoms. “Bear” flags also have a tendency to slope against the trend. Their trendlines run parallel as well.
Pennants look very much like symmetrical triangles. But pennants are typically smaller in size (volatility) and duration. Volume generally contracts during the pause with an increase on the breakout.
The Head and Shoulders Pattern
The Head and Shoulders Pattern is generally regarded as a reversal pattern and it is most often seen in up-trends. It is also most reliable when found in an up-trend as well. Eventually, the market begins to slow down and the forces of supply and demand are generally considered in balance.
The Following is a Typical Trend of a Head and Shoulders Pattern
Sellers come in at the highs (left shoulder) and the downside is probed (beginning neckline).
Buyers soon return to the market and ultimately push through to new highs (head) .
However, the new highs are quickly turned back and the downside is tested again (continuing neckline)
Tentative buying re-emerges and the market rallies once more, but fails to take out the previous high. (This last top is considered the right shoulder.)
Buying dries up and the market tests the downside yet again. Your trendline for this pattern should be drawn from the beginning neckline to the continuing neckline.
Volume has a great importance in the Head and Shoulders Pattern. Volume generally follows the price higher on the left shoulder. However, the head is formed on diminished volume indicating the buyers aren’t as aggressive as they once were. And on the last rallying attempt-the left shoulder-volume is even lighter than on the head, signaling that the buyers may have exhausted themselves.
New selling comes in and previous buyers get out. The pattern is complete when the market breaks the neckline. (Volume should increase on the breakout.)
The Head and Shoulders Pattern can sometimes be inverted. The inverted head and shoulders is typically seen in downtrends. What’s noteworthy about the inverted head and shoulders is the volume aspect. The Following is a Typical Trend of an Inverted Head and Shoulders Pattern
The inverted left shoulder should be accompanied by an increase in volume.
The inverted head should be made on lighter volume.
The rally from the head however, should show greater volume than the rally from the left shoulder.
Ultimately, the inverted right shoulder should register the lightest volume of all.
When the stock then rallies through the neckline, a big increase in volume should be seen.
Аналитические обзоры Форекс
Представляем Вашему вниманию ежедневно обновляемый раздел аналитики, который ведут для Вас профессиональные аналитики компании ИнстаФорекс. Каждый из специалистов, представленных в разделе, проводит аналитические обзоры в соответствии с его видением текущей ситуации на международном валютном рынке Форекс. Однако все представленные ниже обзоры не являются прямыми рекомендациями или поводом для действий, а несут в себе исключительно анализ текущей ситуации на валютном рынке. В некоторых случаях мнения аналитиков на какие-либо изменения в текущей ситуации рынка могут расходиться, в этой связи, мы рекомендуем Вам следить за публикациями только одного аналитика, который на Ваш взгляд наиболее ясно и верно оценивает ситуацию на международном валютном рынке Форекс.
Подписаться на рассылку
Оформить подписку на Форекс аналитику
Хотите получать Форекс аналитику на Ваш почтовый ящик? Оформите подписку в режиме онлайн и получите ежедневные живые обзоры от профессиональных аналитиков компании ИнстаФорекс. Вы сами сможете выбрать аналитиков и виды технического и фундаментального анализа рынка Форекс, которые будут приходить на ваш электронный почтовый ящик каждый день. Держите руку на пульсе рынка Forex вместе с ИнстаФорекс!
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Chart patterns in forex trading
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