Chart Patterns

Symmetrical Triangle Chart Pattern

July 16, 2011 Chart Patterns

To practice the symmetrical triangle example detailed in this article visit http://tradingsim.com. Symmetrical Triangle Definition A symmetrical triangle is the most common triangle chart pattern. It is comprised of price fluctuations where each swing high or swing low is smaller than its predecessor. This coiling price movement creates a structure of a symmetrical triangle. As a [...]

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Double Top – Reversal Chart Pattern

July 16, 2011 Chart Patterns

Double Top Definition Double Top is a chart pattern with two swing highs very close in price. This pattern can be seen in all time-frames. There are a few requirements to classify a chart pattern as a double top: Two peaks that are near equal in price Equal distance in terms of time between highs [...]

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Pennant Chart Formation

July 3, 2011 Chart Patterns

Pennant Chart Definition A pennant chart formation occurs after a security experiences an impulsive up or down move. After such a strong run-up, the security will take a “breather” before continuing in the direction of the primary trend. This breather resembles a symmetrical triangle, where two trendlines converge to a point, hence the term “pennant”. [...]

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Dead Cat Bounce Definition & Chart Example

July 3, 2011 Chart Patterns

Dead Cat Bounce Definition A dead cat bounce is a trading term used to define when a stock in a severe decline has a sharp bounce off the lows.  A dead cat bounce occurs due to the enormous amount of short interest in the market.  Once the supply and demand is unbalanced, any sort of [...]

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Diamond Chart Formation

July 3, 2011 Chart Patterns

Diamond Chart Pattern Definition A diamond chart formation is a rare chart pattern that looks similar to a head and shoulders pattern with a V-shaped neckline. Diamond chart reversals rarely happen at market bottoms, it most often occurs at major tops and with high-volume. Since diamonds are a variation of head and shoulders tops, you [...]

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Bull Trap – Chart Reversal Pattern

June 24, 2011 Chart Patterns

Bull Trap Definition A bull trap occurs when longs take on a position when a stock is breaking out, only to have the stock reverse and shoot lower. This counter move produces a trap and often leads to sharp sell offs. Bull Trap Setup Bull traps have a very basic setup. You will want a [...]

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