Trading Patterns
Trading patterns in trading evaluate the performance and outcomes of trading strategies by identifying recurring price formations that signal potential market movements. Here are some of the most commonly used trading patterns:
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- Reversal Patterns: Indicate a potential change in trend direction, such as Head and Shoulders or double top/double bottom.
- Continuation Patterns: Suggest the trend will persist, including formations like triangles, flags, or pennants.
- Candlestick Patterns: Use one/two/three candlestick to signal reversals or continuations, like Common Doji or Hammer.
- Harmonic Patterns: Utilize Fibonacci ratios to identify complex reversal zones, like Gartley (Bullish) Pattern or Bat (Bearish) Pattern patterns.
- Gap Patterns: Highlight price gaps that signal strong momentum or exhaustion, such as Breakaway Gap or Runaway Continuation Gap.