important chart patterns Flashcards
what does a double top pattern often indicate?
it often indicates an upcoming trend reversal as it is telling us buying pressure is just about finished
what type of pattern is this and what does it indicate?
a head and shoulders pattern often indicates a trend reversal
typically, if the slope of the neckline in a head and shoulders pattern is steeper, it produces a ____ reliable signal (more/less)
more
what should you measure in a head and shoulders (or inverted head and shoulders) pattern to get an estimate of how much the price will approximately move?
the distance between the head and neckline
what type of pattern consists of two trend lines converging and signaling a pause in the current trend?
wedge chart patterns
when a rising wedge forms after a downtrend, it usually indicates a ____?
continuation of the down move
when a rising wedge occurs after an uptrend, it usually indicates_____?
a bearish reversal
what type of chart pattern is this, and what is it indicating?
a rising wedge after an uptrend indicates a bearish reversal
what does this chart pattern indicate?
a rising wedge after a downtrend indicates a continuation
what is this chart pattern and what does it indicate?
a falling wedge after a downtrend indicates an uptrend might occur
when a falling wedge occurs after an uptrend, it usually indicates what?
the trend will resume later on
what is the type of chart pattern formed when the price is bounded by parallel support and resistance levels?
a rectangle
if a rectangle forms after a downtrend, where will price likely go after it breaks out?
back into a downtrend; it had to consolidate and “catch its breath.”
price usually falls by the same height as when it fell into a rectangle chart pattern
what chart pattern is formed when buyers or sellers pause to catch their breath before taking the pair in the same direction? (it is a tiny symmetrical triangle)
penants
where will price go?
a bearish pennant indicates price will continue down