1) Symmetrical Triangles:
A chart pattern used in technical analysis that is easily recognized by the distinct shape created by two converging trend lines. It designed by drawing two trend lines that connect a series of sequentially lower peaks and a series of sequentially higher troughs. The signals to buy or sell when there breakout between the triangle & the price line
2) Head & shoulder:
The pattern contains three successive peaks with the middle peak (head) being the highest and the two outside peaks (shoulders) being low and roughly equal.
Trading Signals
Place a stop-loss just above the last peak below the neckline
After the breakout, price often rallies back to the neckline which then acts as a resistance level. Go short on a reversal signal and place a stop-loss one tick above the resistance level.
3) Wedges:
Falling Wedges:
Falling wedges is a bullish pattern that begin from the top then the prices contract.
This price action forms a cone that slopes down as the reaction highs and reaction lows converge.
Rising Wedges
A rising wedge is generally considered bearish and is usually found in downtrends. They can be found in up trends too, but would still generally be regarded as bearish.
4) Flags & Pennants:
Flags:
A flag is a small rectangle pattern that slopes against the previous trend.
The prices between the two parallel lines form a channel to form a square.
Bullish flags are characterized by lower tops and lower bottoms, with the pattern slanting against the trend.
Bearish flags are characterized by higher tops and higher bottoms with the pattern slanting against the trend.
Pennants:
A pennant is a small symmetrical triangle that begins wide and converges.
Bullish pennants are characterized by lower tops and lower bottoms, with the pattern slanting against the trend.
Bearish pennants are characterized by higher tops and higher bottoms with the pattern slanting against the trend
5) Cup with Handle:
The cup formed after an advance and looks like a half circle or rounding bottom.
As the cup is completed, a trading range develops on the right hand side and the handle is formed.
A subsequent breakout from the handle's trading range signals a continuation of the prior advance.
The cup pattern should take weeks to form without any upper limit.
The handle may form over one or two weeks but may also take several months.
A "V" shaped bottom would be considered too sharp of a reversal to qualify. The softer "U" shape ensures that the cup is a consolidation pattern with valid support at the bottom of the "U". The perfect pattern would have equal highs on both sides of the cup, but this is not always the case.
The handle represents the final consolidation/pullback before the big breakout and can retrace up to 1/3 of the cup's advance, but usually not more. The smaller the retracement is, the more bullish the formation and significant the breakout. Sometimes it is prudent to wait for a break above the resistance line established by the highs of the cup.
6) Higher Lows and Lower Highs
7) Rectangles
RSI with Momentum
It measures the amount of change in commodity’s price during a period of time.
Using both RSI & Momentum for average 14 days will enable a solid strategy in determining signals.
Signal to buy:
RSI rises above 50 but stays below 70, and momentum rises above zero.
Signal to sell:
RSI falls below 50 but stays above 30, and momentum falls below zero
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