Learn Forex Price means the price while pattern means pattern . So price model could mean the patterns that emerge price movements. It adopts the basic principles of technical analysis that says history always repeats itself. It is true that from time to time price movements form a specific pattern that repeats.
Basically pricing model, there are two types of inversion model and continuation pattern .
Reversal Pattern
a. Double Top and Double Bottom
We begin our discussion of reversal pattern beforehand. The first to be discussed is double top and double bottom.
You will understand the word "top" as a "peak" and "bottom" as "valley" . So "double top" means "two peaks" while "double bottom" means "two valleys."
The motif of the double top and double bottom is like two peaks and two adjacent valleys. Both models are easy enough to spot and also has a high accuracy.
The image above is an illustration of the pattern of double top . This pattern usually appears at the end of the uptrend and a bearish indication. Note that there are six points marked on the image. One could say that there is potential double top pattern will be formed if the price moved down from point (3). Remember, new potential. When the point (4) breaks, then we can say that the top two reasons were trained, in other words: "unconfirmed". Also note that the confirmation of a double top is actually a line break "basic" .
If the pattern already too "confirm", then the next price movement bearish potential. The arrow indicates a potential bearish potential distance may occur. The distance could be pursued as far as the price movement level is the highest point of base. So if for example the distance between the level above the base is 100 pips, then prices will potentially decline of 100 pips and Basic penetrated.
However, there are times pullback happen backcourt Basic before the tecapai bearish target. In general, potential withdrawal occurs when prices are already "halfway" towards that goal. If if the target is 100 pips movement, then usually pullback will potentially occur when the price dropped about 50-60 pips after basic translucent. if the withdrawal goes "too far" until translucent again base then the model is said to be are no longer valid or fail (failure).
Double bottom is simply the inverse of the double top. this pattern usually appears at the end of the downtrend and have a bullish indication. When basic translucent and this trend is confirmed, then the potentially bullish price How to estimate the target of its bullish movement exactly the same as the double top, only the upward direction. Double bottom is said to fail if the drop happened on until translucent down base.
b. Triple Triple Up and Down
Both models is actually not very different from the double top and double bottom. Only triple top a three peaks and triple bottom a three valleys . How to identify the confirmation is the same, break the line of Basic . Similarly, considering the target of the movement after the pattern is confirmed.
Below is an illustration of a top and bottom triple triple.
in Figure above shows that there is a possibility of a withdrawal will take place in base point (7), but keep in mind that this kind of decline (but often) is not always the case. Still, if Basic translucent again when the withdrawal
Note :. The third point of the valley or peak should not be exactly the same level, but the difference should not be too large. In other words, at first, the third point of the valley looks the same level. Similarly, in the model of double top and double bottom level peaks and troughs should match exactly.
c. Head And Shoulders and Inverse Head and Shoulders
The model is also a reversal pattern which is very popular because of its accuracy is quite high. Named head and shoulders because it forms a pattern as if forming head and shoulders. Sometimes this model is often "salahpersepsikan" as triple top or triple bottom, but there are key factors that differentiate this model with triple top or triple bottom
Consider the basic model of a head and shoulders below :.
If you look closely, we see that the point (3) of this model is higher than the point (1) and (5). In the triple top pattern, these three points are likely the same level. The highest peak is the point that PANELS it, while point (1) and (5) are the points shoulders- him.
The head and shoulders pattern a bearish reversal if it appears at the end of an uptrend. Konfirmasinua is when the line neckline enters (point 6). If this trend is confirmed, the price will probably move as far as distance between the top of the head to the neckline In the above image, represented by the red arrow
pullback too often (remember: .. Do not always) going back to the surface of the neck before the price moves down to reach the movement target price. The pattern is said fail if a fall occurs across the top of the neck.
The opposite of a head and shoulders pattern is the pattern of head and shoulders reversed . This pattern is a bullish reversal pattern that usually appears at the end of a downtrend. Confirmation of exactly the same as the head and shoulders. If this trend is confirmed, the price will probably go as far as distance between the top of the head to the neckline
The picture below will help you to explain the reason head and shoulders inverse :.
Continuation Pattern
a. Triangle
Now we will discuss examples of configuration continuation of . We leave triangle .
From the name, you might be able to estimate the shape of the model. Yes, this model has a shape similar to a triangle. This pattern occurs because the market is moving sideways and a fight between bull and bear balanced, so that eventually the price conical motion graphics and shaped like a triangle.
There are three types of triangle:
- symmetrical triangle
- Ascending triangle
- descending triangle
We will discuss one by one from symmetrical triangle.
Although the meaning is a symmetrical triangle, but in reality it is not always symmetrical. symmetrical triangle is a triangle pattern that has the supporting line (lower line) and the resistor (upper line) convergent (slope opposed to a point). To make it easier to understand, look at the picture below:
In the above image you can see that the pattern is formed when the market moves sideways after experiencing "rally" bullish. The term "consolidation". The example above shows a symmetrical triangle that is formed during an uptrend.
A symmetrical triangle must have at least four turning points (reversal point) consists of two points and two points above the valley. The image above shows a symmetrical triangle with six turning points, namely point 1, 2, 3, 4, 5 and 6. The confirmation of this trend is a break top line ( the upper line). When this model was confirmed, the next move is on the rise. How to estimate the target should be based on reference symmetrical triangle, which is the distance from point A to 1. Thus, if for example, its baseline along 100 pips, then you can expect the next move to be as much as 100 pips.
Another method that can be used to estimate the target of the movement is to draw a line parallel to the bottom line, where the line starts from point 1.
As another reason, any pullback could occur. In the picture above shows a decline occurs from step 7 back to point 8 located in the upper line area.
If you look back, the line of the upper and lower line line meet at a given time. The point which we call apex . You need to pay attention to the point of breaking the top line is a confirmation of the symmetrical triangle pattern should not be too close to the apex.
Typically, prices would have entered the top line at a distance of about 2/3 (two thirds) ¾ (three quarters) of the length of the pattern. "long pattern" in question is the distance from the baseline to the top. So if breakage occurs less than 2/3 or more than ¾ pattern length, most likely invalid.
also occurs during an uptrend, the symmetrical triangle may also occur during the downtrend. is the same as its position at the bottom. If, in the example above you forward out of the line greater confirmation, and prices tend to move up, so if the pattern occurs at the break time of the downtrend, you will look forward to the bottom line and the price tends to go down. only the difference.
ascending triangle
Basically, the ascending triangle is not very different from the triangle symmetrical in terms of analysis. The second difference is only in its shape model.
ascending triangle is a continuation pattern that typically appears during the uptrend. The emergence of this trend is a sign that the downward pressure is beyond a downward pressure gradually.
As with the symmetrical triangle, ascending triangle pattern must also have at least four points of reversal. The image above shows the ascending triangle with six turning points. Confirmation of the trend is a breakdown of the top line so that the potential to be followed by bullish movement. How to estimate the movement of the target price is also similar to a symmetrical triangle, only its base instead relied on point 1, but instead relied on point 2.
Although basically the ascending triangle is a continuation pattern but it could also be a reversal pattern if it occurs during a downtrend. In such circumstances, breaking the top line is a confirmation that the ascending triangle is a trend reversal. Consider the image below to help you understand:
The model is popular by the name of ascending triangle bottom
descending triangle
We talked about the symmetrical triangle and the ascending triangle. Looks like you have a lot more to understand what kind of triangle-3, namely descending triangle.
Simply put, the descending triangle is the reverse of the ascending triangle. Simple right? Thus, if the ascending triangle is a bullish pattern, the descending triangle is a bearish pattern. Descending triangle is a continuation pattern that emerged during the downtrend.
How, simple, right?
descending triangle could also turn into a trend reversal if it appears in the current uptrend, its name was changed in top-down triangle. Thus, the story will be like in the picture below:
b. Flag and Pennant
We will discuss flag beforehand. Flag is actually a small canal that appears after the rally. direction opposite the direction of its rally of the Channel. So if there is a small descending channel that emerged after the bullish rally, it is called bull flag. Conversely, to small canal that appear after the bearish rally called by bearish. flag
look at the table below:
Yes, that forms the base of the flag. Now, you already know why this model is considered a flag: because of its similar shape to the flag (flag) and poles (Flagpole). Flag represented by a small canal while Flagpole is a point a to b seen in the picture above.
on the bearish flag, breaking the lower channel line is up for confirmation. Prices tend to move down if the bearish flag was confirmed.
Conversely, the bullish flag, confirmation is a break of the upper line of the channel down. Projected further price movement is bullish if the bullish flag was confirmed.
How to determine the movement of the target price is also simple. Simply measure the length Flagpole its course. Flagpole along this distance to be achieved by termungkinkan price movement. For example, if the length Flagpole sound is 100 pips, then prices will tend to move up to 100 pips following the pattern of the flag of his confirmed.
But in practice, most traders stop (closing) after the price movement "halfway" before reaching the target. . For example, if the target is so far 100 pips, so they tend to stop 50-60 pips
Terms of the flag is as follows :.
- There was a rally in front of the channel small form [1945020direction]
- past channel must be opposite to the direction of the rally before.
- long channel (flag) at least one third of the length Flagpole.
OK, we will discuss flag now. Pennant is essentially the development of a model of symmetrical triangle. Only flag rally was preceded by a long and steep. One could say that the pennant was the result of interbreeding between the symmetrical triangle with the flag.
Therefore Pennant similar to a symmetrical triangle and flag, then itself rules applicable to the symmetrical triangle and flag also applies the pennant.
Below is an illustration showing a form of flag.
c. Wedge formation and training Rectangle
Wedge formation
Wedge almost similar to the flame . However, the slope of the two lines of its triangular unidirectional in the sense that both pointing up or down. Degree slope are different, but unidirectional. The image below will clarify the definition of the corner.
We can identify with regard corner slope that leads up or down. Generally; almost similar to the flag; the slope of the wedge as a continuation pattern opposite to the prevailing trend. So corner fall is bullish while rising wedge is a bearish pattern
Note :.
Although fundamentally corner is a continuation pattern, but can also function as a wedge reversal pattern, but these events are rare. Falling Wedge bullish reversal could be the case at the end of a dowtrend. Conversely, if the rising wedge appears at the uptrend, it could be a bearish trend reversal.
training Rectangle
training Rectangle has many names, but the trend is very easy to recognize. This model represents a pause that occurs when prices move sideways between two parallel horizontal lines.
sometimes called Rectangle trading range or congestion zone . Whatever its name, this model represents a period of consolidation in a trend, and is usually followed by a movement searag with previous trends.
A rectangle should have at least four points of reversal. In the example image above, you can see an example of a rectangle with six turning points. rectangle bullish confirmation is breaking the resistance line or top line sedangkah rectangle bearish confirmation is a break of the support line or bottom line.
d. Continuation Head and Shoulders Pattern
Previously, we discussed the model of the head and shoulders like a trend reversal. On the model of head and shoulders continuation, the patterns formed completely identical to a head and shoulders pattern. The difference is the following:
- head and shoulders pattern emerged during the downtrend. Break of the neckline pattern is confirmed head and shoulders continuation.
- inverse head and shoulders pattern appears when the uptrend. Break of the neckline is a confirmation of head shoulders pattern and reverse action.
So do not be confused. All you need to remember is that pattern head and shoulders reversed model has bullish implications , while head and shoulders pattern has bearish implications whatever at the time that the model of emerging trends. Easy right?
e. The concept of Supply and Demand
Supply means the availability or supply, as demand means that demand.
Simple, supply of language and demand means there is supply and demand, where an offer is the seller, while those who apply ?? is a buyer.
Price always incorporated under the laws of supply and demand it. If the offer (the Offer) for goods is high, but the demand (request) is weak product, then the price will fall. If demand is booming, but the supply is limited, automatic peak prices.
In short, if you sell a lot, but few are willing to buy, which means that the goods are not selling. Consequently, product prices will drop. Conversely, if many are willing to buy, but in limited quantities, it would sell the goods, the price will skyrocket up automatically.
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