chart patterns

Question 1

What are buy or sell signals?

Answer 1

• When the price closes above a previous high
• When price closes above the top or below the bottom of the chart
• To wait for breakouts

Question 2

Signals are…

Answer 2

timely

Question 3

What are characteristics for connecting peaks

Answer 3

• Look for multiple peaks at or near the same price
• imagine connecting those peaks with horizontal or near horizontal lines
• Price does not close above this price

Question 4

What are characteristics of Connecting Valleys

Answer 4

• Look for multiple valleys that bottom near or at the same price
• Price doesn’t close below this price

Question 5

how do patterns with curves look like?

Answer 5

upside down bowl shape or inverted and backward J
are called inverted and ascending scallops

Question 6

What are the characteristics of patterns with curves?

Answer 6

Price trends in a straight line upward until rounding over at the top then retracing a position of the prior gain

round turns appear better on the inside of the chart - check peaks and valleys that form turns

Question 7

What are the four variations of scallops

Answer 7

inverted
non inverted
ascending
descending

Question 8

Patterns with diagonals are known as

Answer 8

triangles - ascending, descending, symmetrical and broadening family - broadening tops, bottoms, wedges and the right angled ascending and descending brothers

Question 9

What are the characteristics of diagonal patterns?

Answer 9

• Trendlines that slope upward or downward when searching for chart patterns
• Only a close below the trend line counts as a breakout
• Use prior action to help determine future behaviour