The Figures that Appear on Price Charts
One of the best ways to make money in the financial market is by trading chart patterns or price patterns. In this article, we’ll look at the eight best chart patterns for those who like to make money. If you don’t like making money, you’re in the wrong channel.
So, I’ll start by separating the patterns into 3 categories, since figures from technical analysis are different from Candlestick patterns, which in turn are different from the likes of flags and pennants. So let’s clarify everything. Now you’ll understand clearly the various categories of price patterns and will finish this video knowing the 8 best patterns of technical analysis.
One of the most fascinating topics in the financial market is chart patterns, which are recognizable shapes that appear recurrently on the chart and, as a result, have predictive value. Don’t worry, I’ll simplify. But let me start from the beginning.
Price fluctuations result from the actions of thousands of individuals buying and selling, governed by emotions such as fear and greed. Predicting the behavior of an individual human is difficult, but the collective behavior of humans, the masses, behaves predictably.
In the case of the financial market, thousands of buyers and sellers produce recognizable patterns in price charts, and by identifying these patterns, we can position ourselves in the market to extract a profit that compensates for the risk we assume.
The 3 Categories of Patterns
We can divide price patterns, or chart patterns, into 3 categories. The first category is that of large patterns, which include graphical figures such as head and shoulders, double top, rectangle, cup and handle. The second category is that of small patterns, where we’ll have flags, pennants. Notice that the flag is composed of few candles compared to a head and shoulders pattern.
And the third category is that of Candlestick patterns, which can be formed by a single candle, or two, or three. But what are the best patterns that these thousands of buyers and sellers generate in the market at all times, what are the eight best patterns?
1. Reversal Pivot
The first one belongs to the category of Large Patterns, we’re talking about the reversal pivot. Now we move on to the category of small patterns, which are formed in a smaller price range, where I consider the gift to be the best of all, followed by the flag, and I’ll explain why.
Now we move on to the category of Candlestick patterns, and what is a Candlestick? It’s a type of graphical representation of price fluctuations, so the Candlestick pattern is a price pattern, it’s a graphical pattern. We separate the two categories, but in the end, we’re talking about a pattern generated by the trading of thousands of human beings that we want to identify to profit from.
2. Rectangle
3. Triangle
4. Gift
5. Flag
6. Pennant
7. Hammer
8. Shooting Star
Watch my video about these chart patterns, which is the only video on YouTube that actually presents the best chart patterns:
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