Chart Patterns In Forex

Last Updated on September 17, 2020 by Alphaex Capital

How to trade chart patterns

This section is an introduction to technical analysis and where we will discuss common chart patterns that can lead to significant reversals and breakouts in the markets which when spotted and traded can, in turn, make huge profits.

Just like candlestick patterns, chart patterns are easy to spot and can prepare you for an explosive trade.

We can use chart patterns as indications of market structure breakouts and combine it with our knowledge on previous price action – e.g) support and resistance levels etc.

By spotting these patterns, or catching them in the process of forming, we are able to prepare a future trade based on the emerging pattern.

WE MUST NOT TRADE A PATTERN UNTIL IT HAS FULLY FORMED.

Remember, as traders we are NOT predicting the future here… As much as it may appear so, we are instead looking for areas where the money is and jumping on that cash train.

Remember: The Golden rule of chart patterns is to WAIT until the chart has formed, then ACT.

In fact: You must NOT trade until anything has been validated, not just a chart pattern.

If the pattern hasn’t formed, you have no VALID confirmation of the pattern and can, therefore, LOSE money just because you jumped the gun.

As a professional trader, your role isn’t to be the first one to put a trade on but to be the person taking on the least amount of risk for the highest possible returns.

If the chart patterns are not formed, simply wait until the MARKET CONFIRMS the pattern.

What we have gone through so far will tilt the odds in your favor and give you a trading EDGE.

What we are about to go through is to increase opportunities in the market place to trade using your edge.

Like trading indicators, chart patterns are a self-fulfilling prophecy because everyone looks out for the patterns to trade from.

The advantage you have is that you have the knowledge already on how to execute trade’s with the highest accuracy, and now you are going to be taught how to enter chart patterns just as well.

You already have the base knowledge we taught earlier, now we can show you how to accurately draw these chart patterns and become a better trader.

The chart patterns that you should focus on, that have the highest profitability chance are:

  • Double Tops
  • Double Bottoms
  • Head & Shoulders
  • Wedge Patterns
  • Pennant Patterns
  • Flag Patterns

Once you have mastered the above patterns, you will be unstoppable as your tools and experience grow each day with practice (live or demo) you will gain confidence in your abilities to identify and execute them.

Combining these patterns with the technical analysis previously will open up great and consistent opportunities to trade each day, giving you a higher chance to profit on a daily basis (however, you can still lose money!).

Over the next few lessons, you will learn the absolute gold standard in highlighting these patterns and executing them with the highest accuracy, whilst predicting their moves precisely.

Combined with risk management, there is no bottom and there is no roof when it comes to making money.

Admiral markets live account

Chart Patterns Quiz

Take our “Chart Patterns” quiz below to ensure that this simple lesson gets engraved to the back of your memory. This part of the course is crucial to understand.

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What Are Chart Patterns?

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You Must Wait For [ANSWER] Confirmation For Validation...

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You Must Not Trade An Emerging Pattern Unless It Has..?

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What Is The Purpose Of Chart Patterns?

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Chart Patterns: The Quiz!
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