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The most commonly used forex chart patterns

Forex chart patterns are graphical representations of market conditions and can be used by traders to identify potential trading opportunities. They help traders see potential price reversals and continuation patterns and can be used on all timeframes. Click here to contact a broker who can help you with these patterns.

Head and shoulders

The head and shoulders pattern is a bearish reversal pattern formed by a left shoulder, a head, and a right shoulder. The left shoulder is formed when the market makes a higher high, followed by a lower high. Furthermore, the head is formed when the market makes another higher high, followed by a lower low. The right shoulder is formed when the market makes one higher high, followed by a lower low.

The neckline of the pattern is drawn by connecting the lows of the left shoulder and the head. A break below the neckline signals that the pattern is complete, and prices will likely continue falling.

Double top

The double top pattern is a bearish reversal pattern that forms after an extended uptrend. The pattern is formed by two consecutive highs that are roughly equal, followed by a pullback. A break below the pattern’s neckline signals that the trend has reversed and prices are likely to continue falling.

Double bottom

The double bottom pattern is a bullish reversal that forms after an extended downtrend. The pattern is formed by two consecutive lows that are roughly equal, followed by a rally. A break above the pattern’s neckline signals that the trend has reversed and prices are likely to continue rising.

Triple top

The triple top pattern is a bearish reversal pattern that forms after an extended uptrend. The pattern is formed by three consecutive highs that are roughly equal, followed by a pullback. A break below the pattern’s neckline signals that the trend has reversed and prices are likely to continue falling.

Triple bottom

The triple bottom pattern is a bullish reversal pattern that forms after an extended downtrend. The pattern is formed by three consecutive lows that are roughly equal, followed by a rally. A break above the pattern’s neckline signals that the trend has reversed and prices are likely to continue rising.

Wedge

The wedge pattern is a continuation or reversal pattern that can form after an extended uptrend org downtrend. The pattern is formed by two converging trendlines, with the upper trendline acting as resistance and the lower trendline acting as support. A break out of the wedge signals prices are likely to continue in the breakout direction.

Head and shoulders top

The head and shoulders top is a bearish reversal pattern that forms after an extended uptrend. The pattern is formed by a left shoulder, a head, and a right shoulder. The left shoulder is formed when prices rally to a new high, pull back, and then rally to a lower high. Furthermore, the head is formed when prices rally to a new high and then pull back. The right shoulder is formed when prices rally to a lower high and then pull back. A break below the pattern’s neckline signals that the trend has reversed and prices are likely to continue falling.

Head and shoulders bottom

The bottom of the head and shoulders is a bullish reversal pattern that forms after an extended downtrend. The pattern is formed by a left shoulder, a head, and a right shoulder. The left shoulder is formed when prices fall to a new low, rally, and then fall to a lower low. Furthermore, the head is formed when prices fall to a new low and then rally. The right shoulder is formed when prices fall to a lower low and then rally. A break above the pattern’s neckline signals that the trend has reversed and prices are likely to continue rising.

Cup and handle

The cup and handle pattern is an optimistic reversal that forms after an extended downtrend. The pattern is formed by a cup (a consolidation period) followed by a handle (a minor pullback). A break above the handle’s resistance signals that the trend has reversed and prices are likely to continue rising.

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