The Forex Chart Pattern Cheat Sheet

The Forex Chart Pattern Cheat Sheet
May 19, 2017 Market Traders Institute

There are so many forex chart patterns that you may find it challenging to keep track of all of them, especially when you need to make a quick decision. This is where a chart pattern cheat sheet becomes an essential tool for you to use. Here are some chart patterns that will keep you going.

Understanding the Chart Patterns

When trading, here are some essential points that you need to keep in mind.

  1. Double top or double bottom feature two peaks, or troughs, that peak at close to the same price prior to falling away again.
  2. Head and shoulder patterns will reveal a small peak followed by a higher peak, and then a lower peak. The visual presentation resembles a head and two shoulders. When inverse, this appears in the opposite direction.
  3. The rising channel will appear as a sideways consolidation move, communicating that prices are trapped between two values.
  4. The falling channel is the opposite of the rising channel and includes a slightly downward as well as sideways movement.
  5. The rectangles and pennants are continuation patterns that consolidate price and normally move sideways. They will normally appear when the price breakout continues from earlier existing trends.

Patterns Created During the Uptrend

  1. Double Top – Has a reversal signal and the next move would be down.
  2. Head and Shoulders – Has a reversal signal and the next move would be down.
  3. Rising Wedge –  Has a reversal signal and the next move would be down.
  4. Falling Wedge – Has a continuation signal and the next move would be up.
  5. Bullish Rectangle – Has a continuation signal and the next move would be up.
  6. Bullish Pennant – Has a continuation signal and the next move would be up.

Bullish Pennant Pattern EURUSD Chart Pattern

Patterns Created During the Downtrend

  1. Double Bottom – Has a reversal signal and the next move would be up.
  2. Inverse Head and Shoulders – Has a reversal signal and the next move would be up.
  3. Rising Wedge – Has a continuation signal and the next move would be down.

Rising Wedge Chart

  1. Falling Wedge –  Has a reversal signal and the next move would be up.
  2. Bearish Triangle – Has a continuation signal and the next move would be down.
  3. Bearish Pennant – Has a continuation signal and the next move would be down.

When reading these Forex charts, you should keep in mind that the markets will normally move in waves, and you should use the charts to help you identify trends. When you see that there is a trend moving in reverse, then it would be a good idea to get out and cut your losses.

Before you choose to risk money on a trade, it is worth checking these patterns to make an informed decision. The more you practice, the more likely you will be to get excellent and consistent results. When creating a plan that features price action to find opportunities, these chart patterns can be exactly what you need to make your trading stronger and more successful.

 

Summary
Forex Chart Patterns Cheat Sheet
Article Name
Forex Chart Patterns Cheat Sheet
Description
This article reveals the most common candlestick chart formations with a cheat sheet that provides details about each one.
Publisher Name
Market Traders Institute
Publisher Logo

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