How to Trade Divergence: Definitions, Strategies, Examples
Divergence is a widely discussed topic in the technical analysis world. It can signal potential momentum or potential reversals which is why technical analysts examine this indication extensively. Quick Notes: What is Divergence? Divergence is simply when price moves in the opposite direction of an indicator. Popular indicators that traders use when identifying and trading […]
3 Chart Patterns Every Trader Should Know
Those who trade with technical analysis have identified chart patterns in the stock, usually with a candlestick chart. Technical analysts, those who study technical analysis, are able to use these chart patterns in an attempt to predict price movement. Before learning chart patterns though, the traders should understand the concept of support and resistance. What […]
How to Trade the Horn Tops and Bottoms Chart Pattern
The Horn Tops and Bottoms pattern is particularly interesting because while utilizing the same concept of support and resistance, it goes in-depth into the individual candlesticks of the pattern. The Horn pattern also utilizes the concept of a breakout to catch a reversal. The Horn pattern is a reversal pattern that has two types: The […]
How to Trade the Head and Shoulders Pattern
The Head and Shoulders pattern is one of the most well-known patterns in the technical analysis world. It consists of multiple parts with multiple trading opportunities. The pattern utilizes the concept of support and resistance to identify points of reversal and breakout. This pattern is sometimes called the Head and Shoulders Reversal pattern because it […]
How to Trade the Flag Pattern in the Stock Market
The Flag pattern is a stock market pattern analyzed by technical analysts, those who study technical analysis. It can be related to a corrective pattern in the topic of Elliott Waves because it moves in the opposite direction of the trend. The Flag pattern is called a “Flag” because when created, it resembles a flag. […]
How to Trade Double Tops and Double Bottoms
The Double Pattern is pretty simple, as all of the moves associated with it just use two simple factors: Support and resistance. The Double Pattern is a fairly common pattern when it comes to technical analysis as it can indicate a potential reversal of the trend. If you can master recognizing support and resistance points […]
Guide on How to Trade the Cup and Handle Pattern
The Cup and Handle pattern is one of the most commonly discussed chart patterns in the technical analysis world. The pattern is called the Cup and Handle pattern because it resembles a cup with a handle. According to Investopedia, American William J. O’Neil defined this pattern. There are different parts associated with it and the […]
How to Trade Breakouts: Definitions, Strategies, Examples
A breakout in trading is when price moves above or below an area of support or resistance. They can be bullish or bearish and can indicate a possible trend in the breakout direction. Breakouts are sometimes referred to as trendline breaks, which will most likely be categorized as either ascending or descending. Technical analysts often […]
How to Trade the Diamond Pattern
The Diamond pattern is a very distinctive pattern that utilizes the concept of support and resistance. The pattern signals a reversal of the current trend as it is very similar to a Head and Shoulders pattern. If analyzed correctly, many trading opportunities may arise during and after the pattern. Quick Notes: The Diamond Pattern Not […]
What Is Technical Analysis? – Definitions, Strategies, Examples
Technical analysis is the method of applying chart analysis and examining movements in price. Technical analysts, those who focus and study on technical analysis, use price movement, volume, and market psychology to try and predict trends. Quick Notes: How Does Technical Analysis Work? Technical analysts use concepts like chart patterns, support and resistance, indicators, and […]