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Joined Nov 2009
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Summary of Chart Formations
Chart formations are like bazookas because they often create huge explosions on the chart.
Triangles
Symmetrical triangles
Consist of lower highs and higher lows
Place entry orders above the lower highs and below the higher lows
Ascending triangles
Consist of higher lows and a resistance line
It usually means that the price will break the resistance line and go higher but you should place entry orders on both sides just in case the resistance line is too strong.
Place your entry orders above the resistance line and below the higher lows.
Descending triangles
Consist of lower highs and a support line
Usually mean that the price will break the support line and go lower but you should place entry orders on both sides just in case the support line is too strong.
Place your entry orders above the lower highs and below the support line.
Trend Reversal formations
Double Top
Happens after an extended uptrend.
Formed by 2 peaks that can’t break a certain level. This level becomes a resistance line.
Place our short entry order below the low point of the valley in between the 2 peaks. Double Bottom
Happens after an extended downtrend.
Formed by 2 valleys that can’t break a certain level. This level becomes a support line.
Place our long entry order above the high point of the peak in between the 2 valleys.
Head and Shoulders
Happens after an extended uptrend.
Formed by a peak, followed by a higher peak, and then another lower peak. A neckline is formed by connecting the low points of the two troughs or “valleys”.
Place your short entry order below the neckline.
We calculate our target by measuring the distance between the high point of the head and the neckline. This is the approximate distance that the price will move after it breaks the neckline.
Reverse Head and Shoulders
Happens after an extended downtrend.
Formed by a valley, followed by a lower valley, and then another higher valley. A neckline is formed by connecting the high points of the 2 peaks.
Place your long entry order above the neckline.
We calculate our target by measuring the distance between the low point of the head and the neckline. This is the approximate distance that the price will move after it breaks the neckline.
Chart formations are like bazookas because they often create huge explosions on the chart.
Triangles
Symmetrical triangles
Consist of lower highs and higher lows
Place entry orders above the lower highs and below the higher lows
Ascending triangles
Consist of higher lows and a resistance line
It usually means that the price will break the resistance line and go higher but you should place entry orders on both sides just in case the resistance line is too strong....
Ignored
IBFX has an indicator that creates all these chart patterns on the MT4 charts AND you have the autochart software with it that screens all the currency pairs and updates them every 15 min.
You must have a live account with them to have access to this.
Alternatively you can join autochartist.com and pay $29 a month...
