If you want to learn how to trade cryptocurrencies successfully, or any other type of product where a chart is in play, it is a great idea to learn about chart patterns / chart formations.
These chart patterns can be really useful for your technical analysis, mixed with our strategies, it will give you a huge advantage when trading. Let’s look at a list of the most common chart patterns, before we take a closer look on how to spot them.
Chart Patterns / Chart Formations: The Basics
Here is a list of the most common and important chart patterns that you will come in touch with…
- Double Top Reversal
- Double Bottom Reversal
- Head and Shoulders Top
- Head and Shoulders Bottom
- Falling Wedge
- Rising Wedge
- Rounding Bottom
- Triple Top Reversal
- Triple Bottom Reversal
- Bump and Run Reversal
- Flag, Pennant
- Symmetrical Triangle
- Ascending Triangle
- Descending Triangle
- Price Channel
- Measured Move – Bullish
- Measured Move – Bearish
- Cup with Handle
The best way to learn these is to open up a chart and start drawing. You can draw the green lines you see on the image below to get the patterns. Your training, drawing, does not have to happen on a live chart, you can look at old data, before a price goes up or down, and see if you can spot the pattern / formation and mark it. This will give you the experience and knowledge you need to spot them on live trades/charts… Enjoy.
Here is a more detailed image. Use this for your learning and entertainment, it can be really fun and profitable to spot these patterns, as these normally work really well.
The Cup and Handle looks something like this (remember that these are not strict, just similar, or close to the actual pattern is enough for these to be valid):
You can learn from these patterns / formations in several ways:
- Practice (looking for, spotting and drawing the formations yourself).
- Looking at the images above and memorizing them.
- Researching further. You can look up each pattern and absorb knowledge about it.
The rest is to use it to your advantage. Use it to make money. Use it to become a better trader…
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