Chart pattern

Chart pattern

A chart pattern is a pattern that is formed within a chart when prices are graphed. In stock and commodity markets trading, chart pattern studies play a large role during technical analysis. When data is plotted there is usually a pattern which naturally occurs and repeats over a period of time. Chart patterns are used as either reversal or continuation signals.

Some people[who?] claim that by recognizing chart patterns they are able to predict future stock prices and profit by this prediction; other people respond by quoting "past performance is no guarantee of future results" and argue that chart patterns are merely illusions created by people's subconscious. Certain theories of economics hold that if there were a way to predict future stock prices and profit by it then when enough people used these techniques they would become ineffective and cease to be profitable. On the other hand, predicting what others will predict the market will do, would be valuable information.

Patterns

Examples of "classical" chart patterns as popularized by Edwards and Magee and used widely by traders and investors include:

See also

External links

v · Technical analysis
Concepts
Support and resistance · Trend line · Breakout · Market trend · Dead cat bounce · Elliott wave principle · Fibonacci retracements · Pivot point · Dow Theory
Charts
Patterns
Chart
Head and shoulders · Cup and handle · Double top and double bottom · Triple top and triple bottom · Broadening top · Price channels · Wedge pattern · Triangle · Flag and pennant · Island reversal · Gap
Candlestick
Simple
Doji · Hammer · Hanging man  · Inverted hammer · Shooting star  · Marubozu · Spinning top
Complex
Three white soldiers · Three Black Crows · Morning star · Hikkake pattern
Indicators
Average Directional Index (ADX) · Ichimoku Kinkō Hyō · Moving Average Convergence/Divergence (MACD) · Mass Index · Moving average (MA) · Parabolic SAR (SAR) · Smart Money Index (SMI) · Trix · Vortex Indicator (VI) · Know sure thing oscillator (KST)
Relative Strength Index (RSI) · Stochastic oscillator · True Strength Index (TSI) · Williams %R (%R)
Volume
Accumulation/Distribution Index · Money Flow Index (MFI) · On-balance volume (OBV) · Volume Price Trend (VPT) · Force Index (FI) · Negative volume index (NVI) · Ease of movement · Put/call ratio (PCR)
Other

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