How to Read Reversal Stock Indices Trading Patterns for Beginners

The common reversal stock indices chart patterns used to trade stock indices that beginner stock indices trades should know are described below.

Reversal Stock Indices Trading Patterns

The commonly used stock indices reversal chart patterns are:

Double Tops Reversal Chart Pattern

Double tops stock indices chart pattern is an M shaped two tops or 2 peaks pattern that forms on the stock indices price chart during a upward stock indices trend.

Double tops stock indices pattern is a bearish stock indices pattern that forms when stock indices price reaches a resistance zone.

The stock indices price will move upward & then dip slightly then turn up & move upward to the top level where it had reached or slightly below this level then move downward again forming what is known as a double top stock indices trading pattern.

Double Bottoms Reversal Chart Pattern

Double bottoms stock indices chart pattern is a W shaped two bottoms or two lows stock indices pattern that forms on the stock indices price chart during a downward stock indices trend.

Double bottoms stock indices pattern is a bullish stock indices pattern that forms when stock indices price reaches a support zone.

The stock indices price will move downward in then move upwards slightly then turn downward & move downward to the bottom level where it had reached or slightly above this level then move upwards again forming what is known as a double bottom stock indices trading chart pattern.

Head & Shoulders Reversal Chart Pattern

Head and Shoulders pattern is a bearish reversal stock indices chart pattern that forms after a upwards stock indices trend.

There is an initial peak which is the first shoulder then a slight dip in the 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 neck-line and the reversal stock indices trading signal from this head and shoulders reversal stock indices chart pattern is confirmed once stock indices price moves below this neckline.

Reverse Head & Shoulders Reversal Chart Pattern

Reverse Head & Shoulders pattern is a bullish reversal stock indices chart pattern that forms after a downward stock indices trend.

There is 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 trading signal from this reverse head and shoulders stock indices chart pattern is confirmed once stock indices price moves above this neckline.

How to Read Reversal Stock Indices Chart Patterns for Beginner Traders