How to Read Different Types of Stock Indices Chart Patterns for Beginner Traders
Continuation Trading Patterns
Continuation Trading Patterns
Pennant stock indices chart pattern is a continuation stock indices pattern that looks like a symmetrical triangle in shape and is drawn using support & resistance lines.
Pennant chart pattern occur during a stock indices trend - either upward stock indices trend or downwards stock indices trend. These pennant chart patterns signal consolidation periods of the stock indices price.
Bullish pennant stock indices trading chart pattern - occurs during an upward stock indices trend direction and this bullish pennant stock indices chart pattern shows that stock indices price has the potential to move upwards and continue in the overall upward stock indices trend direction.
Bearish pennant stock indices trading pattern - occurs during a downward stock indices trend direction and this bearish pennant stock indices chart pattern shows that stock indices price has the potential to move downwards and continue in the overall downward stock indices trend direction.
Continuation Trading Patterns
Stock Indices wedge chart patterns are continuation stock indices trading chart patterns.
Bullish wedge stock indices chart pattern - Rising Wedge, Ascending Wedge, Ascending Triangle is a bullish continuation stock indices chart pattern that signals stock indices prices are likely to continue moving upwards once stock indices prices move above this rising wedge stock indices chart pattern - ascending wedge stock indices trading pattern.
Bearish wedge stock indices chart pattern - Falling Wedge, Descending Wedge, Descending Triangle is a bearish continuation stock indices chart pattern that signals stock indices prices are likely to continue moving downwards once stock indices prices move below this falling wedge stock indices chart pattern - descending wedge stock indices trading chart pattern.
Continuation Trading Patterns
Rectangle stock indices chart pattern is a stock indices trend continuation pattern & this pattern has horizontal support & resistance areas.
Bullish rectangle stock indices pattern - When a rectangle stock indices pattern forms during a stock indices upward trend it signals an upward stock indices trend move is likely to follow next once stock indices price breakout of this stock indices triangle chart pattern.
Bearish rectangle stock indices pattern - When a rectangle stock indices pattern forms during a stock indices downward trend it signals a downward stock indices trend move is likely to follow next once stock indices price breakout of this stock indices triangle chart pattern.
Reversal Stock Indices Chart Patterns
Double Tops Stock Indices Trading Pattern
Double tops stock indices pattern is a reversal stock indices chart pattern that forms after a stock indices uptrend & this stock indices pattern forms 2 tops at approximately the same level.
Bearish Reversal Stock Indices Signal - Double tops stock indices pattern is a bearish reversal stock indices trade signal.
Double Bottoms Stock Indices Trading Chart Pattern
Double bottom stock indices pattern is a reversal stock indices chart pattern that forms after a stock indices downtrend & this stock indices chart pattern forms 2 bottoms at approximately the same level.
Bullish Reversal Stock Indices Signal - Double bottoms stock indices chart pattern is a bullish reversal stock indices trade signal.
Head & Shoulders Chart Pattern
Head & Shoulders pattern is a reversal stock indices pattern which forms at the tops of an upward stock indices trend. Head and Shoulders pattern is a bearish reversal stock indices chart pattern that forms after a stock indices upwards trend.
There is an initial peak which is the first shoulder then a slight dip in stock indices price, then a second higher peak which is the head then another stock indices price dip followed by the last peak in stock indices price which is the second shoulder.
The lowest points between the two stock indices price lows forms the neckline & the reversal stock indices signal from this head and shoulders pattern is confirmed once stock indices price moves below this neckline.
Reverse Head and Shoulders Stock Indices Trading Chart Pattern
Reverse Head & Shoulders pattern is a reversal stock indices pattern that forms at the bottom of a downward stock indices trend. Reverse Head and Shoulders chart pattern is a bullish reversal stock indices chart pattern that forms after a stock indices trading downwards trend.
There's an initial dip which is the first inverse shoulder then a slight peak in stock indices price, then a second lower dip which is the reverse head then another stock indices price peak followed by the last stock indices price dip in stock indices price which is the second inverse shoulder.
The highest points between the two stock indices price peaks forms the neck-line & the reversal stock indices signal from this reverse head and shoulders pattern is confirmed once stock indices price moves above this neckline.
Consolidation Stock Indices Trading Chart Patterns
Consolidation stock indices Chart patterns are also known as symmetric triangles - the consolidation pattern looks like a symmetrical triangle.
Symmetrical triangle stock indices chart pattern signal a consolidation in the stock indices price & a stock indices price breakout is likely to happen on either side once the stock indices price breaks out of this consolidation triangle stock indices trading pattern.
Stock Indices traders will wait for the stock indices price to break out in one direction before opening a stock indices trade in direction of the stock indices price breakout.
Summary:
Continuation Stock Indices Chart Patterns: Pennants - bullish pennant and bearish pennant, Wedges - Ascending wedge and descending wedges and Rectangles
Reversal Stock Indices Chart Patterns: Double Tops, Double Bottoms, Head and Shoulders, Reverse Head and Shoulders
Consolidation Stock Indices Chart Patterns: Symmetrical Triangles
How to Read Different Types of Stock Indices Chart Patterns for Beginner Traders
