Identifying chart patterns is simply a form of technical analysis. And
technical analysis is just a method for trying to forecast 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. (More on trends.)
In my opinion, these are some of the best patterns to trade.
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.