CHARTS, TRENDS, AND PATTERNS - Section 2 - Chapter 8 - Bar Chart Pattern (Price Pattern)

1. Lecture - 17
Price Chart Patterns
CMT LEVEL - I

2. CMT LEVEL - I
Learning Objectives
 Chart Patterns Basics
- Double Top and Bottom
- Triple Top and Triple Bottom
- Symmetrical Triangle
- Ascending & Descending
Triangle
- Diamond Top & Bottom
- Wedge and Climax
- Rounding Top, Rounding
Bottom
- Head-and-Shoulders Top &
Bottom
- Flag and pennant

3. Why we Use Price Patterns?
Study of
Consolidation &
Breakouts
Future
Forecasting of
Price
Best Suitable for
Turtle & Breakout
Trading Strategy
Complete Trading
Plan
High Probability
Target Prices
Apply to all time
frame charts

4. Price Pattern
•Price patterns provide a framework to analyze the
battle ranging between bulls and bears
•Price pattern analysis can be used to make short-term
or long-term forecasts.
•Price pattern have both Continuation & Reversal
Patterns

5. Categories of Price Patterns
Reversal Pattern Continuation Pattern
Double Top & Bottom
Reversal
Flag & Pennants
Head & Shoulder Top &
Bottom
Symmetrical Triangle
Falling & Rising Wedge Ascending Triangle
Diamond Top & Bottom Descending Triangle

6. Support & Resistance
Reversal Price Patterns

7. Double Top (Reversal Pattern)
Prior Trend
(Uptrend)
First Peak of
Current Trend
Second peak with
low volume
Support Break of
trough between
two peaks
Support turned
into resistances
Price Target of
Distance between
peak & trough

8. Double Bottom (Reversal Pattern)
Prior Trend
(Downtrend)
First Bottom of
Current Trend
Second Bottom
with low volume
Resistance Break
of peak between
two trough
Resistance turned
into support
Price Target of
Distance between
peak & trough

9. Head & Shoulder Top (Reversal Pattern)
Prior Trend (Uptrend)
Left Shoulder (First
Peak of Current Trend)
Head (Consecutive
peak after left shoulder
of current trend)
Right Shoulder(Peak is
lower than head &
equal to left shoulder)
Neckline(Connecting
two lower point )
Slope of Neckline will
affect the degree of
aggressiveness price
movement
Neckline act as support
,if break support
become resistance
with high volume
Price Target of Distance
between Neckline to
head

10. Head & Shoulder Bottom (Reversal Pattern)
Prior Trend
(Downtrend)
Left Shoulder (First
trough of Current
Trend)
Head (Consecutive
trough after left
shoulder of current
trend)
Right Shoulder(trough is
higher than head &
equal to left shoulder)
Neckline(Connecting
two Higher point )
Slope of Neckline will
affect the degree of
aggressiveness price
movement
Neckline act as
resistance ,if break
Resistance become
Support (High Volume)
Price Target of Distance
between Neckline to
head

11. Falling Wedge (Reversal Pattern)
Prior Trend
(Downtrend)
Price create a new
low with
Contraction
Contraction is with
low volume
Volume & Price
create negative
divergence
Resistance Breaks
with high volume
Price moves
between resistance
& lower support
line

12. Rising Wedge (Reversal Pattern)
Prior Trend
(Uptrend trend)
Price create a new
High with
Contraction
Contraction is with
low volume
Volume & Price
create negative
divergence
Support Breaks
with high volume
Price moves
between Rising
resistance &
support line

13. Diamond Top & Bottom (Reversal Pattern)

14. Support & Resistance
Continuation Price
Patterns

15. Bullish Flag & Pennant (Continuation Pattern)
Sharp Move due to
prior consolidation
Break Out with high
volume
Flag is a
consolidation in form
of triangle (Pennant)
or lower channel
Flag is a
Consolidation with
low volume
Price break flag with
high volume
Price target is equal
to the distance of
Flag Pole
Move is called as Flag
Pole

16. Bearish Flag & Pennant (Continuation Pattern)
Sharp fall in price
Break Out with high
volume
Flag is a
consolidation in form
of triangle (Pennant)
or upper channel
Flag is a
Consolidation with
low volume
Price break flag with
high volume
Price target is equal
to the distance of
Flag Pole
Move is called as Flag
Pole

17. Symmetrical Triangle (Continuation Pattern)
Current Trend is
consolidation
During
consolidation
volume are in
decreasing trend
Break Out is either
side (Generally
Follow the long
term trend)
Price break
Consolidation with
high volume
Price target is
equal to the open
Phase of Triangle
Price range is
squeeze in support
& resistance line

18. Ascending & Descending Triangle (Continuation Pattern)