Part 3 — Chart patterns
Reversal, continuation and bilateral patterns - each one with how the course trades it. All 62 slides in the order the course teaches them — each one explained underneath.
Trend Reversal Patterns — Trend Continuation Patterns. Bilateral Patterns. PART III.
Slide 1 of 62
Patterns — Trend Reversal.
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Double bottom — Triple bottom. Inverted Head & Shoulders. Falling Wedge. Double top. Triple top. Head & Shoulders. Rising Wedge. Bullish reversal. (reversal from down to up). Bearish reversal. (reversal from up to down). Cup & Handle. Trend reversal patterns.
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Double Bottom / Double Top — The shape is drawn on the chart with the levels that define it. What matters is where it forms and what price does at the boundary, not the name.
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Double Bottom / Double Top — a chart from the course deck. The markings on it are the lesson; read them left to right.
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- Double Bottom / Double Top: — Both patterns play out the same way. When price comes back to test the old low or old high it is thrown back by very strong support or resistance. The reason is that at the earlier high or low there was very heavy buying or selling, which built a level that is hard to break. This pattern trades well on the 1H and 4H frames. A double bottom tends to appear at the end of a downtrend, and a double top at the end of an uptrend. Double bottom / double top.
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Double bottoms — The shape is drawn on the chart with the levels that define it. What matters is where it forms and what price does at the boundary, not the name.
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Double tops — The shape is drawn on the chart with the levels that define it. What matters is where it forms and what price does at the boundary, not the name.
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Head & Shoulders and Inverted Head & Shoulders — The chart carries the detail; the markings on it are what the course is teaching here.
Slide 9 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 10 of 62
What to watch for when — trading the pattern. Head & Shoulders. Inverse Head & Shoulders. Volume through both shoulder-building phases is usually low. The high or low of the right shoulder is usually level with the left shoulder. No shoulder is allowed to exceed the head. The most reliable place for these two patterns is at the top of an uptrend (H&S) and at the bottom of a downtrend (inverted H&S).
Slide 11 of 62
In this pattern the neckline is not simply a flat horizontal line. Identifying it takes some flexibility. The same applies to the H&S pattern — The potential entry for this pattern is after price breaks the neckline decisively. Show students the inverted H&S patterns that FAILED. Inverted Head & Shoulders. (Inverse Head & Shoulder).
Slide 12 of 62
This pattern is made of a head and two shoulders. The rule is that the left and right shoulders may be level or close to level. — And no shoulder may rise above the head of the pattern. If one does, the pattern is void. The best entry is to wait for price to break the neckline and close below it. Head & Shoulders.
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Trend reversal patterns — Falling Wedge. Rising Wedge.
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How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
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This pattern is made of higher lows and higher highs. Price is in an uptrend but each high is not far above the last — a sign the uptrend is running out of strength — This is a bearish pattern; price tends to break out of the wedge near its end. The best entry is to wait for price to break the lower edge of the wedge and close below the pattern. The break must come with volume. Rising wedge.
Slide 16 of 62
This pattern is made of lower lows and lower highs. Price is in a downtrend and forms a wedge sloping down — This is a bullish pattern; price tends to break out of the wedge near its end. The best entry is to wait for price to break the upper edge of the wedge and close above the pattern. The break must come with volume. Falling wedge.
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Expanding wedge — The shape is drawn on the chart with the levels that define it. What matters is where it forms and what price does at the boundary, not the name.
Slide 18 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 19 of 62
Expanding wedge — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 20 of 62
Expanding wedge — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 21 of 62
Expanding wedge — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 22 of 62
Trend reversal patterns (cont.) — Cup & Handle.
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How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 24 of 62
Trend reversal patterns (cont.) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 25 of 62
Trend reversal patterns (cont.) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 26 of 62
Trend reversal patterns (cont.) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 27 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
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Rounding Bottom/Top — The shape is drawn on the chart with the levels that define it. What matters is where it forms and what price does at the boundary, not the name.
Slide 29 of 62
Rounding Bottom/Top — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 30 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 31 of 62
Rounding Bottom/Top — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 32 of 62
Patterns — Trend Continuation.
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Bull Flag & Bear Flag — The shape is drawn on the chart with the levels that define it. What matters is where it forms and what price does at the boundary, not the name.
Slide 34 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 35 of 62
Bullish Rectangle & — Bearish Rectangle.
Slide 36 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 37 of 62
Bullish Rectangle & Bearish Rectangle — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 38 of 62
Bullish Rectangle & Bearish Rectangle — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 39 of 62
Falling Wedge & Rising Wedge — The shape is drawn on the chart with the levels that define it. What matters is where it forms and what price does at the boundary, not the name.
Slide 40 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 41 of 62
Falling Wedge & Rising Wedge — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 42 of 62
Falling Wedge & Rising Wedge — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 43 of 62
Bullish Pennant & Bearish Pennant — The chart carries the detail; the markings on it are what the course is teaching here.
Slide 44 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
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Bullish Pennant & Bearish Pennant — a chart from the course deck. The markings on it are the lesson; read them left to right.
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Bullish Pennant & Bearish Pennant — a chart from the course deck. The markings on it are the lesson; read them left to right.
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Patterns — Bilateral.
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Bilateral patterns (two-way) — Ascending. Contracting. Descending. Symmetrical.
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Bilateral patterns (continuation / reversal) — Ascending triangle.
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How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 51 of 62
Bilateral patterns (continuation / reversal) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 52 of 62
Bilateral patterns (continuation / reversal) — Descending triangle.
Slide 53 of 62
How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 54 of 62
Bilateral patterns (continuation / reversal) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 55 of 62
Bilateral patterns (continuation / reversal) — Symmetrical triangle.
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How to trade the pattern — The entry rule is on the chart itself: the course marks where the entry sits, where the stop goes, and what the pattern has to do before the trade is valid. Read the markings before moving on.
Slide 57 of 62
Bilateral patterns (continuation / reversal) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 58 of 62
How to tell — a Pennant from a Symmetrical. PENNANT. SYMMETRICAL. A pennant is a continuation pattern, while a symmetrical triangle is a consolidation pattern. Volume while either pattern forms is low. A pennant requires a flagpole; a symmetrical triangle does not. Formation time: a pennant forms in far less time than a symmetrical triangle. With a symmetrical triangle price can break either way. A pennant usually breaks in the direction of the existing trend (continuation pattern).
Slide 59 of 62
Bilateral patterns (continuation / reversal) — Contracting triangle.
Slide 60 of 62
Bilateral patterns (continuation / reversal) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 61 of 62
Bilateral patterns (continuation / reversal) — a chart from the course deck. The markings on it are the lesson; read them left to right.
Slide 62 of 62What this part covers
21 topics, in order. Each link jumps straight to that slide.
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