Trading Forex Using Price Channels

Price channel indicator is a volatility indicator which is similar to Bollinger bands. This indicator appears as two lines set above and below the price of a currency pair or other trading instruments. The upper line/upper band is fundamentally the high point or price of n-number of periods. Inversely, the lower line/lower band is the […]

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Volatility Indicators – Bollinger Bands Explained

Bollinger band is a volatility indicator developed by John Bollinger. This indicator measures volatility based on standard deviation. Bollinger band is most used volatility indicator and one of the widely used indicators in technical analysis.   Calculation: Calculation of Bollinger band is based on a simple moving average. The default period of Bollinger band and […]

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Theory of Gaps

Gaps are specific candlestick pattern and generally occur when there is a significant gap between two candles. In this case, the low and open price remains higher than the high and close price of the previous candle. Gaps generally represent extreme conditions during any news release or price sensitive information. Gaps are profitable as the […]

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Continuation Pattern – Flags and Pennants

Flags and pennants are very effective and profitable continuation chart patterns. These two chart patterns found after a sharp price movement. These patterns require a short time to develop rather than other chart patterns.   Flag Pattern : In flag pattern, there will be a rectangle sloping in the opposite direction of the prevailing trend. […]

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Continuation Patterns – Rectangles (Bullish and Bearish)

Rectangles formed by drawing two horizontal lines, one horizontal line includes high points only, and another horizontal line includes low points only. This pattern also called “Box” or “Trading Range”. Minimum price movement equals to the distance between two trend lines when drawn from the breakout point. This pattern can be bullish or bearish. Let’s […]

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Trading with Hook Reversal Pattern

Hook reversal pattern is a candlestick pattern which also found in a bar chart. This pattern can be either bullish or bearish. Bullish hook reversal pattern is generally found after a downfall and it indicates a possible bullish reversal. Bearish hook reversal pattern is generally found after an upward movement which indicates the possibility of […]

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Double Top and Double Bottom Reversal Patterns

Double top and double bottom are simple, profitable and classic chart patterns. They are reversal patterns. Double Top Chart Pattern : In a double top pattern; the upper trend line consists two similar or nearly similar high points and the lower trend line consist a low point. This low point of lower trend line lies […]

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Reversal Patterns – Head and Shoulders Top and Bottom

The head and shoulders pattern is a very famous and profitable chart pattern. Head and shoulders pattern is a complex pattern as it contains three distinct characteristics in one pattern. These characteristics are trend lines, support or resistance lines, and rounding. Head and shoulders pattern can be divided into two types; 1. Head and Shoulders/Head […]

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Understanding Chart Patterns in Technical Analysis

The chart pattern is the reflection of investors/traders psychology that appears in a bounded area. Charts patterns are identified by drawing trend lines and vertical support-resistance lines. We can figure out the future possible price hikes by identifying chart patterns. One of the basic assumptions of technical analysis is, “History tends to repeat itself”. This […]

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