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Technical and Graphical Analysis

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ahmetselcukars@gmail.

com 11 May 2023


ahmetselcukars@gmail.com 11 May 2023

[Technical and Graphical Analysis]

Copyright © 2022 Trading Technicals

All rights reserved. Thank you for buying an


authorized edition of this book and for
complying with copyright laws by not
reproducing, scanning, or distributing any
part of it in any form without the written
permission of the publisher, Trading
Technicals.

Made by the TikTok user @tradingtechnicals

Followers over 100,000+


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INTRODUCTION
Trading can be profitable for the informed
trader, like how you will be after reading this
book. This book is written for anyone new to
trading Stocks, Crypto, or Forex. Any prior
knowledge in these financial markets is a
plus.

Why is Technical Analysis so


important?

The charts don't lie; the beauty of technical


analysis is that it is "scam proof" It relies on
your ability to read the charts and price data.
In technical analysis, price patterns often
sign transitions between rising and falling
trends. It is helpful to understand patterns
and spot them out in the trading world,
whether it is Stocks, Crypto or Forex.

Technical Analysis helps investors anticipate


the future but doesn't make accurate
predictions.
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ALL CHAPTERS

1. CANDLE STICK
PATTERNS

GRAPH
2.
INDICATORS

CHART
3.
PATTERNS
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CANDLE
STICK
PATTERNS
Chapter. 1
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What is a
Candle Stick?
A candlestick is a single bar on a candlestick
price chart, showing traders market
movements at a glance.
Each candlestick shows the open price, low
price, high price, and close price of a market for
a particular period of time.

The body, Which represents the open-to-


close range.
The wick, or shadow, that indicates the
intra-day high and low.
The color, which reveals the direction of
market movement – a green body indicates
a price increase, while a red body shows a
price decrease.
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BULLISH
CANDLE-STICK PATTERNS

= Uptrend
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Hammer
The Hammer candlestick pattern consists of a
small body and a long wick extending from the
bottom.

The real body of this candle is small and is


located at the top with a lower shadow which
should be more than twice the real body. This
candlestick chart pattern has no or little upper
shadow/wick

This pattern can be seen at the support line


of a downward trend (see example below).
Hammer candlesticks typically occur after a
price decline.

Hammer candlesticks indicate a potential


price reversal to the upside. The price must
start moving up following the hammer; this
is called confirmation.

Little to no
upper wick
Long lower
wick
Hammer
candle-stick
bouncing off
support
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Piercing Line
A piercing pattern is a multiple candlestick
chart pattern that is formed after a downtrend
indicating a bullish reversal.

It is formed by two candles

The first candle is a bearish candle which


indicates the continuation of the downtrend.

The second candle is a bullish candle which


opens gap down but closes more than 50% of
the real body of the previous candle which
shows that the bulls are back in the market
and a bullish reversal is going to take place.

The close on the


Strong red 2nd bar must be
box 1st bar more than half-way
up the body of the
1st bar

Reversal signal
after a down-
trend
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Bullish Engulfing

Bullish Engulfing is a multiple candlestick chart


pattern that is formed after a downtrend
indicating a bullish reversal.

The bullish engulfing pattern is formed of


two candlesticks. The first candle is a short
red body that is completely engulfed by a
larger green candle.

The buying pressure increases, leading to a


reversal of the downtrend.

The second Bullish candlestick is engulfing


the body of the first bearish candle stick.

Second
candle is
bullish

Bearish
candle stick
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Morning Star

The Morning Star is a multiple candlestick chart


pattern that is formed after a downtrend
indicating a bullish reversal.

This is a three-stick pattern: one short-


bodied candle between a long red and a long
green candle.

The middle candle of the morning star


captures a moment of market indecision
where the bears begin to give way to bulls.

The third candle confirms the reversal and


can mark a uptrend, would be a good buy
opportunity.

Bullish
candle stick

In some cases
there will be a
gap down

Second candle
stick can be
red or green
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Three White Soldiers

This pattern is made up of three long green


candles in a row, this pattern also has to
open and close higher than the previous
period.

Three White Soldiers is a strong bullish


signal that shows up after a downtrend.

This pattern is considered a reliable


reversal pattern when confirmed by other
technical indicators like the relative
strength index (RSI).

Bullish
Direction
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Inverse Hammer

An Inverted Hammer is formed at the end of


the downtrend and gives a bullish reversal
signal.

In this candlestick, the real body is located


at the end and there is a long upper shadow.
It is the inverse of the Hammer Candlestick
pattern.

This pattern is formed when the opening and


closing prices are near to each other and the
upper shadow should be more than twice the
real body.

Inverse Hammer
candle-stick
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Three Inside Up

The Three Inside Up is multiple candlestick


pattern which is formed after a downtrend
indicating bullish reversal.

It consists of three candlesticks, the first


being a long bearish candle, the second
candlestick being a small bullish candle
which should be in the range the first
candlestick.

The third candlestick should be a long


bullish candlestick confirming the bullish
reversal.

The relationship of the first and second


candlestick should be of the bullish harami
candlestick pattern.

Three Inside Up
Pattern
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Bullish Harami

The Bullish Harami is multiple candlestick


chart pattern which is formed after a
downtrend indicating bullish reversal.

It consists of two candlestick charts, the


first candlestick being a tall bearish candle
and second being a small bullish candle
which should be in the range of the first
candlestick.

The first bearish candle shows the


continuation of the bearish trend and the
second candle shows that the bulls are back
in the market.

Bullish Harami
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Three Outside Up

The Three Outside Up is a multiple candlestick


pattern, which is formed after a downtrend
indicating a bullish reversal.

It consists of three candlesticks, the first


being a short bearish candle, the second
candlestick being a large bullish candle
which should cover the first candlestick.

The third candlestick should be a long


bullish candlestick confirming the bullish
reversal.

The relationship of the first and second


candlestick chart should be of the Bullish
Engulfing candlestick pattern.

Three Outside Up
Pattern
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On-Neck

The On-Neck pattern occurs after a


downtrend when a long real bodied bearish
candle is followed by a smaller real bodied
bullish candle which gaps down on the open
but then closes near the prior candle’s close.

The pattern is called a neckline because the


two closing prices are the same or almost
the same across the two candles, forming a
horizontal neckline.

Same
Neckline
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Tweezer Bottom

The Tweezer Bottom candlestick pattern is


a bullish reversal candlestick pattern that is
formed at the end of the downtrend.

It consists of two candlesticks, the first one


being bearish and the second one being
bullish candlestick.

Both the candlesticks make almost or the


same low. When the Tweezer Bottom
candlestick pattern is formed the prior trend
is a downtrend.

Tweezer
Bottom Pattern

Same Low
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Rising Three Methods

The “rising three methods” is a bullish, five


candle continuation pattern which signals an
interruption, but not a reversal, of the ongoing
uptrend.

The candlestick pattern is made of two long


candlesticks in the direction of the trend i.e
uptrend in this case. at the beginning and
end, with three shorter counter-trend
candlesticks in the middle.

The candlestick pattern is important as it


shows traders that the bears still do not
have enough power to reverse the trend.

Bullish
Direction
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BEARISH
CANDLE-STICK PATTERNS

= Downtrend
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Hanging Man

Hanging Man is a single candlestick pattern


which is formed at the end of an uptrend and
signals bearish reversal.

The real body of this candle is small and is


located at the top with a lower shadow
which should be more than the twice of the
real body. This candlestick pattern has no or
little upper shadow.

The psychology behind this candle


formation is that the prices opened and
seller pushed down the prices.

Suddenly the buyers came into the market


and pushed the prices up but were
unsuccessful in doing so as the prices closed
below the opening price.

Hanging Man
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Dark Cloud Cover

The dark cloud cover candlestick pattern


indicates a bearish reversal – a black cloud
over the previous day’s optimism. It
comprises two candlesticks: a red
candlestick which opens above the previous
green body, and closes below its midpoint.

It signals that the bears have taken over the


session, pushing the price sharply lower. If
the wicks of the candles are short it
suggests that the downtrend was extremely
decisive.

Opening price
Highest price
of the day

Closing price

Confirmation
Opening price

Lowest price
of the day
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Shooting Star

Shooting Star is formed at the end of the


uptrend and gives bearish reversal signal.

In this candlestick chart the real body is


located at the end and there is long upper
shadow. It is the inverse of the Hanging Man
Candlestick pattern.

This pattern is formed when the opening and


closing prices are near to each other and the
upper shadow should be more than the twice
of the real body.

Long upper
Wick
Little to no
lower wick
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Bearish Engulfing

Bearish Engulfing is a multiple candlestick


pattern that is formed after an uptrend
indicating a bearish reversal.

It is formed by two candles, the second


candlestick engulfing the first candlestick.
The first candle being a bullish candle
indicates the continuation of the uptrend.

The second candlestick chart is a long


bearish candle that completely engulfs the
first candle and shows that the bears are
back in the market.

Traders can enter a short position if next


day a bearish candle is formed and can place
a stop-loss at the high of the second candle.

Bearish candle
Bearish candle
closes below the
opens at, or above
pervious candle's
the pervious
open
candles close
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Evening Star

The Evening Star is multiple candlestick


pattern which is formed after the uptrend
indicating bearish reversal.

It is made of 3 candlesticks, first being a


bullish candle, second a doji and third being
a bearish candle.

The first candle shows the continuation of


the uptrend, the second candle being a doji
indicates indecision in the market, and the
third bearish candle shows that the bears
are back in the market and reversal is going
to take place.

The second candle should be completely out


of the real bodies of first and third candle.

Strong finish into


Star first candle body
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Three Black Crows

The Three Black Crows is multiple candlestick


pattern which is formed after an uptrend
indicating bearish reversal. These candlesticks
are made of three long bearish bodies which do
not have long shadows and open within the real
body of the previous candle in the pattern.

Traders use it alongside other technical


indicators such as the relative strength
index (RSI).

The opposite pattern of three black crows is


three white soldiers, which indicates a
Bullish trend.

Bearish
Direction
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Three Inside Down

The Black Marubozu is a single candlestick


pattern which is formed after an uptrend
indicating bearish reversal.

This candlestick chart has a long bearish


body with no upper or lower shadows which
shows that the bears are exerting selling
pressure and the markets may turn bearish.

At the formation of this candle, the buyers


should be caution and close their buying
position.

Bearish
Direction
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Bearish Harami

The Bearish Harami is multiple candlestick


pattern which is formed after the uptrend
indicating a bearish reversal.

It consists of two candlesticks, the first


candlestick being a tall bullish candle and
second being a small bearish candle which
should be in the range of the first
candlestick chart.

The first bullish candle shows the


continuation of the bullish trend, and the
second candle shows that the bears are back
in the market.

Traders can take a short position after the


completion of this candlestick pattern.

Bearish
Direction
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Three Outside Down

The Three Outside Down is multiple candlestick


pattern which is formed after an uptrend
indicating a bearish reversal.

It consists of three candlesticks, the first


being a short bullish candle, the second
candlestick being a large bearish candle
which should cover the first candlestick.

The third candlestick should be a long


bearish candlestick confirming the bearish
reversal.

The first and second candlestick


relationship should be of the Bearish
Engulfing candlestick pattern. Traders can
take a short position after the completion of
this candlestick pattern.

Bearish
Direction
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Falling Three Methods

The “falling three methods” is a bearish, five


candle continuation pattern that signals an
interruption, but not a reversal, of the ongoing
downtrend.

The candlestick pattern is made of two long


candlestick charts in the direction of the
trend, i.e., downtrend at the beginning and
end, with three shorter counter-trend
candlesticks in the middle.

The candlestick pattern is essential as it


shows traders that the bulls still do not
have enough power to reverse the trend.

Bearish
Direction
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BILATERAL
CANDLE-STICK PATTERNS

These candle-stick
patterns can move in
either direction
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Doji

Doji pattern is a candlestick pattern of


indecision which is formed when the opening
and closing prices are almost equal.

It is formed when both the bulls and bears


are fighting to control prices, but nobody
succeeds in gaining full control of the prices.

The candlestick pattern looks like a cross


with very small real body and long shadows.

Indecision
reversal of
trend

Potential
Direction
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Spinning Top

A spinning top is a candlestick pattern that


has a short real body that's vertically
centered between long upper and lower
wick.

Since buyers and sellers both pushed the


price, but couldn't maintain it, the pattern
shows indecision and that more sideways
movement could follow.

This candle stick pattern is much stronger in


a trending market, be it uptrend or
downtrend.

Potential
Direction
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GRAPHIC
INDICATORS
Chapter. 2
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What are Technical


Indicators?
Trading indicators are mathematical
calculations, which are plotted as lines on a
price chart and can help traders identify certain
signals and trends within the market.

There are different types of trading


indicator, including leading indicators and
lagging indicators.
Leading Indicator is a forecast signal that
predicts future price movements.
Lagging Indicator look at the past trends
and indicates momentum.
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Simple
SMA Moving
Average

A simple moving average is an arithmetic


average of a set of data points where each data
point is added together and then divided by the
total number of data points.

A simple moving average is a smoothing tool


to display trends for a specific number of
periods.

For example, a 50-period simple moving


average finds the closing price of the last
50-periods, sums the 50 closing prices, and
divides by 50 to calculate the average
closing price of the previous 50 periods. New
periods are then added to the calculation,
while the oldest period is deleted from the
calculation.

The simple moving average is typically


plotted as a technical overlay.

Price crossing over SMA


lines indicates uptrend.
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Moving

MACD Average
Convergence
Divergence

The moving average convergence/divergence


(MACD) is a technical indicator of momentum
that uses moving averages to determine a
trend’s strength.

The MACD uses three exponential moving


averages (a short term, a long term, and the
average difference between the short and
long term) to show price momentum.

The MACD indicates changes in trend


direction, as well as overbought and
oversold conditions, by showing the turning
points where the signal line crosses over the
other moving average lines.

MACD crosses below


signal line indicates
MACD crosses above
downtrend(Bearish)
signal line indicates
uptrend(Bullish)
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Relative
RSI Strength
Index

The relative strength index (RSI) is a technical


indicator of momentum that measures the
speed and change of price on a scale of 0 to 100,
typically over the past 14 periods. Readings
over 70 are considered overbought, while
readings below 30 are considered oversold.

When the RSI surpasses the horizontal 30


reference level, it is a bullish sign and when
it slides below the horizontal 70 reference
level, it is a bearish sign.

RSI measures the strength of a security’s


price change by comparing up days and
down days.

Above 70,
indicates
Below 30, Overbought
indicates
Oversold
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Volume-
VWAP Weighted
Average Price

Volume-weighted average price (VWAP)


combines price and volume to show where the
average trading activity has taken place for a
specified period. VWAP is calculated by dividing
the total dollar value of all trades by the
trading volume for the period referenced.

It is also used for support, resistance, entry


and exit levels. Volume-Weighted Average
Price is only used on the intraday time
frame.

VWAP might be as simple as buying the first


closing price above VWAP as an entry, and
selling at a predetermined point above it.

Price breaks
VWAP indicates
a downtrend

Price bounce
off VWAP
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Bollinger Bands

Bollinger bands are a chart overlay, volatility


indicator that show the upper and lower range
of normal price movement based on standard
deviation. There are three lines that compose
Bollinger Bands: A simple moving average
(middle band) and an upper and lower band.

The bands are dynamic/sensitive to changes


in volatility. When the bands widen, price
volatility is increasing. When the bands
tighten, volatility is decreasing.

Price tends to oscillate within the bands and


the upper and lower bands are used as
resistance and support, respectively.
Breakouts above the upper band or below
the lower band are often used as trading
signals.

Band Tightening
Upper Band

Lower Band
Band Widening
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Ichimoku Cloud

The Ichimoku cloud is a technical indicator that


displays support, resistance, momentum, and
trend in one chart overlay. Ichimoku clouds
consolidate a number of indicators by using a
variety of moving averages and other
calculations to indicate areas of support and
resistance on a price chart.

When the price is below the cloud, consider


bearish. When the price is above the cloud,
consider bullish.

The lines include a 9-period average, a 26-


period average, an average of those two
averages, a 52-period average, and a
lagging closing price line.

Ichimoku Cloud
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Pivot Points

Pivot points are calculated using the prior


period’s range to show potential support and
resistance levels. The prior day’s high, low, and
closing price are used to calculate the pivot
point, two levels of support, and two resistance
levels.

They're calculated based on the high, low,


and closing prices of previous trading
sessions. Many traders use pivot points for
intraday entry and exit points, as well as
support and resistance levels for position
scaling.

This indicator will automatically graphs = 7


Pivot Point levels, R1, R2, R3, S1, S2, S3 and P

Pivot Points

R2 = Resistance 2
R1 = Resistance 1

S1 = Support 1
S2 = Support 2
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CHART
PATTERNS
Chapter. 3
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What is Support
and Resistance?
Support & Resistance levels are key price
levels, where supply and demand interaction
create significance levels.

When the price passes through resistance,


that resistance could potentially become
support.

The more often price tests a level of


resistance or support without breaking it,
the stronger the area of resistance or
support gets.

Traders can take either a long position,


meaning go bullish or a short position,
meaning bearish.

Breakout

Resistance Resistance

Breakout

Support Support
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How to draw Support


and Resistance?
How to draw them?
Support and resistance lines need to have at
least two price-point to be drawn. Simply
connect two swing highs or two swing lows in a
price chart with a trendline, and project the
trendline into the future.

Trade the "Break"


Buy when the price falls towards support.
Sell when the price rises towards resistance.

Trade the "Bounce"


Buy when the price breaks up through
resistance.
Sell when the price breaks down through
support.

Breakout
Resistance

Support
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BULLISH
CHART PATTERNS

= Uptrend
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Flag
Pattern Type: Continuation

The Flag Pattern forms in a time of


consolidation and is also considered a bullish
signal, indicating that the current uptrend
may continue. A Flag (Bullish) follows a
steep or nearly vertical rise in price and
consists of two parallel trendlines that form
a rectangular flag shape.

Flag's rectangular shape develops from


parallel trendlines, which form the support
and resistance until the price breaks out.

A breakout occurs out of the flag in the


same direction as the initial move. This
pattern can be viewed on larger time
frames, like daily and weekly.

Resistance
Support

Breakout
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Inverse Head & Shoulder


Pattern Type: Continuation

As price hit lows below the neckline, a


trough is formed. Until it creates three
troughs, or low points: the left shoulder,
head which is the lowest , and right shoulder.

A Inverse Head & Shoulder pattern can be


viewed on larger time frames, like weekly
and monthly.

Traders typically enter into a long position


when the price rises above the resistance of
the neckline.

Breakout

Neckline

Left Shoulder Right Shoulder

Head
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Rounding Bottom
Pattern Type: Continuation

A rounding bottom is a chart pattern that


graphically forms the shape of a "U."

This trend is similar to the chart of the cup


and handle but without the downtrend
handle.

A Rounding Bottom pattern can be viewed


on larger time frames, like hourly and daily.

Traders will feel safe buying at the


breakout, Which is also the starting of a
bullish trend.

Breakout

U - Shape
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Falling Wedge
Pattern Type: Continuation & Reversal

This Pattern starts wider at the top and


gets narrower as it moves down.

The wedge pattern results in breakout-


causing the price to move up. A Falling
Wedge pattern can be viewed on larger time
frames, like hourly and daily.

Many buyers will show up, and volume


should increase as the price breakouts.

Traders will look for buying opportunities at


the breakout and potentially exit at the
start of the Pattern.

Breakout
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Ascending Trinagle
Pattern Type: Continuation

This Ascending Triangle pattern is a bullish


continuation pattern, which means that a
breakout is likely.

To draw this pattern, you need to place a


horizontal line over the resistance points.

And then draw an ascending line along with


the support points. This pattern can be used
on any time frame, even minutes.

Traders will look for a breakout with


volume, and in some cases, price will come,
retest the breakout level and then continue
the uptrend.

Breakout

Ascending Line
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Cup and Handle


Pattern Type: Continuation

The Cup with Handle Pattern resembles the


shape of a cup and a handle. It is an arched
pattern that can be identified by its u-shape,
followed by the handle having a slight
downward drift.

Ultimately the pattern becomes bullish,


completing the 'handle.'

Rounding bottom pattern almost looks the


same as this, but without the handle
formation

Traders will wait for the falling handle to


form and enter at the breakout.

Breakout

Look for
falling trend

U - Shape
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Triple Bottom
Pattern Type: Reversal

A triple bottom is generally seen as three


roughly equal lows bouncing off the support
line.

Later, it is followed by a breakout point,


Which is the best opportunity to enter a
bullish position.

After the breakout point, the price usually


does not retest the neckline.

Traders will enter into a long position after


the breakout point. A triple Bottom pattern
can be viewed on larger time frames, like
hourly and daily.

Breakout

Resistance Line

Bottom 1 Bottom 2 Bottom 3


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Double Bottom
Pattern Type: Reversal

The pattern indicates a reversal in the overall


trend. Double Bottom resembles the look of a
"W.' The price will drop two times and bounce
off the support line, eventually breaking out.

In this case, the price will retest the


breakout point, unlike the Triple Bottom
pattern.

Double Bottom pattern can be viewed on


larger time frames, like hourly and daily.

Traders will look for a breakout BUT will


wait for a retest and bounce of the
resistance line.

Breakout

Resistance Line

Bottom 1 Bottom 2
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BEARISH
CHART PATTERNS

= Downtrend
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Double Top
Pattern Type: Reversal

Double Top is a bearish pattern that occurs


after the price has peaked two times.

And the trend has reversed when the price


breaks support, completing an "M" shape.

This results in an increase in selling volume.


Double Top pattern can be viewed on larger
time frames, like hourly and daily.

Traders will sell when the price breaks


below the support line or, in some cases,
take short positions to make profits.

Frist Top Second Top

Breakout
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Head & Shoulder


Pattern Type: Reversal

A head and shoulder appear as a baseline


with three peaks, where the outside two are
close in height, and the middle is highest.

This pattern is looked at on a daily or, in


some cases, on an hourly time frame.

Keep in mind that the Head & Shoulder


pattern is never in perfect formation.

Traders will look for a break below the


neckline to go short on a position.

Head

Left Shoulder Right Shoulder

Breakout
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Descending Triangle
Pattern Type: Continuation

Descending Triangle is a well-known bearish


pattern, the support line is horizontal, and
the resistance line is descending alongside.

Breaking through the resistance level will


cause the price action to fall.

This pattern can be used on any time frame,


even minutes.

Traders will look for a break below the


horizontal support line to take a short
position.

Descending Line

Breakout
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Triple Top
Pattern Type: Reversal

Triple Top pattern occurs when the price


creates three peaks at the same price levels.

This pattern is a reversal pattern representing


buying weakness and results in a sell-off.

Triple Top pattern can be viewed on larger


time frames, like hourly and daily.

Traders will look to enter a short position or


exit a long position, once the price breaks
below support (neckline).

Top 1 Top 2 Top 3

Resistance

Breakout
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BILATERAL
CHART PATTERNS

These chart
patterns can move
in either the Bullish
or Bearish direction.
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Symmetric Triangle
Pattern Type: Reversal or Continuation

This Pattern includes a triangle, similar to


an angle bracket ( > ) which is used in
mathematics.

The trend lines start to meet and get


squeezed at the end, which means a bullish
or bearish trend is possible.

The formation occurs because prices are


reaching both lower highs and higher lows.
The pattern will display two highs touching
the upper (descending) trendline and two
lows touching the lower (ascending)
trendline.

The Symmetrical Triangle can extend for a


few weeks or many months. Traders will
look for a breakout or a break below and
take either a long or short position.

Breakout
Breakout
Bullish

Bearish

Price getting squeezed


in between the
trendlines Breakout
Breakout
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Price Channel
Pattern Type: Reversal or Continuation

Price Channel slopes up or down and is bound


by an upper and lower trend line. The upper
trend line marks resistance and the lower marks
support.

Price stays in between this support and


resistance levels until it is broken out.

In some cases the price will retest the


breakout point.

Traders can sell when price approaches the


price channel's upper trendline and buy
when it tests the lower trendline.

Breakout
Breakout

Bearish ce
tan
sis
Re

rt
ppo Bullish
Su Re
si
st
an
ce

Su
pp
or
t

Breakout
Breakout
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PRINTABLE
PATTERN
SHEETS
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CHART PATTERNS
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Reversal
Patterns

Continuation
Patterns

Bilateral
Patterns

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