Chart Pattern Strategies (Reversal Patterns)

1. Head and Shoulder Pattern (Bearish Pattern)

Target is the distance from peak to neckline. SL should be neck height or 2% whichever is lower.

2. Inverted Head and Shoulder (Bullish Pattern)

3. Double top pattern (Bearish Pattern): It looks like M sign.

4. Double Bottom Pattern (Bullish Pattern): Looks like a W letter.

5. Broadening Triangle Pattern

WEDGES

1. Rising Wedge- Reversal

Most of the indicators are overbought and divergence would be seen

2. Falling Wedge (REVERSAL)

AlwaYS WAIT for confirmation from indicators in wedge patterns ie you will see divergence or in this case oversold.

Do not make sell position here but instead buy when the price crosses the above trend/resistance line

3. FALLING WEDGE (Continuation):

You can differentiate between the different wedge patterns with the help of trends. If falling wedge is seen in the DOWNTREND then it is REVERSAL pattern and when it is seen in an uptrend then it is a CONTINUATION Pattern.

Moreover during reversal patterns as of above (1 and 2) they show overbought and over sold range of oscillator but in continuation pattern as (3 and 4) there is nothing like that.

IN SHORT: FALLING WEDGE IS ALWAYS BULLISH

and RISING WEDGE IS ALWAYS BEARISH

4. RISING WEDGE (Continuation)

it is just like pullback

EXAMPLES OF ABOVE:

See in this Rising wedge it is a CONT pattern as there is no over bought and over sold in RSI

RISING WEDGE WITH DIVERGENCE

FALLING WEDGE DIVErGENCE