To boost your opportunities on TurboXBT to earn up to 90% in profits, you’ll want to use figures and patterns with technical indicators. While we supply you with the tools necessary for a successful trade, you should be well-versed in identifying patterns and understanding what they mean. So, we’ve put together this article that gives you the basics of figures and patterns in short-term trading.
What are Figures and Chart Patterns?
Patterns appear on price charts as a result of price movements over time. The market may seem to move at random, but the patterns that form help traders asses the market and make better trading decisions.
Types of Figures and Patterns in Trading Short Term
There are several patterns that are formed when using trend lines to connect multiple highs and lows, including:
Ascending and Descending
You can spot this pattern when a slopped line connects a falling low or a rising high; this is then met with a second horizontal trend line connecting highs or lows. The result is a right-angle triangle that leads to a point where the price breaks from the horizontal line toward the sloped line.
Price Channels
Price channels are formed when trend lines create parallel horizontal lines, ascending or descending. You do this by connecting several highs and lows. Most traders buy when the pattern is toward the bottom and sell towards the top.
Head and Shoulders
These patterns are characterized by three peaks; the outside two have similar heights whilst the middle is the highest point. Typically this signifies an upcoming trend reversal, and forms after an uptrend. It’s one of the most tied-and-true reversal patterns.
Rising and Falling Wedges
The difference between ascending/descending triangles and wedges is that the upper and lower line slope go in the same direction. Rising and falling wedges are reversal patterns; a rising wedge indicates a negative trend, and a falling wedge indicates a bullish trend.
Double Top and Bottom
These will appear when the charts move in a manner that look like the letters “W” (double bottom) or “M” (double top). A double top “M” signals a bearish trend reversal; a double bottom “W” represents a bearish price movement.
Conclusion
Identifying figures and patterns is an essential skill. With the basics now covered, you can use our demo platform to practice with this new knowledge before starting real money trades.
