Trading Reversal Patterns & Continuation Patterns - Reversal vs Continuation Patterns

Forex Patterns - Forex Technical Analysis Chart Patterns Trading Strategies

Forex chart patterns are graphical representations of repeating forex price action formations that are commonly used in the forex market to analyze forex price movement.

Chart Patterns is one of the studies used in forex technical analysis to help forex traders learn how to recognize these repeating Chart Patterns formations.

These Chart Patterns are important in Forex trading because when the forex market is not moving in a particular direction it is forming a chart pattern. It is important to know these Chart Patterns formations so as to have an idea of what might be the next move in the forex trading market.

When forex price movements are plotted there are several Chart Patterns formations that occur naturally and repeat themselves over and over again. These Chart Patterns formations are used by a lot of forex technical traders to predict the next forex market move.

Forex traders often study these Chart Patterns formations to gauge supply and demand forces that form the basis for forex price fluctuations.

These Chart Patterns are classified into Three different categories:

1. Reversal Chart Patterns

• Double tops Chart Patterns

• Double bottom Chart Patterns

• Head & Shoulders Patterns

• Reverse head and shoulders Chart Patterns

2. Continuation Trading Patterns

• Ascending triangle Chart Patterns

• Descending triangle Chart Patterns

• Bull flag/pennant Chart Patterns

• Bear flag/pennant Chart Patterns

3. Bilateral

• Symmetric triangle - Consolidation Patterns

• Rectangle - Range Chart Patterns

Reversal Patterns - Reversal Chart Patterns - confirm the reversal of the market trend once this reversal chart pattern setup is confirmed. These Reversal Chart Patterns are formed after extended market trend either upwards or downward & these reversal patterns signal that the market is ready to reverse.

Continuation patterns Chart Patterns - are formations that set up the market for a trend continuation move in direction of the prior Forex trend. These Continuation Chart Patterns are formed when the market is taking a pause before continuing in same direction of the previous Forex trend.

Consolidation patterns Chart Patterns - form when the market is taking a break before deciding the next direction to take. When these Consolidation Chart Patterns are formed - the market is trying to decide which direction to trade.

Technical Chart Analysis of Chart Patterns

There are two types of forex chart analysis, these two might seem similar but are not: the two are:

• Japanese Candlesticks Patterns - Study of a single candlestick - Read Japanese Forex Trading Candles Patterns

• Chart Patterns - Study of a series of forex candlesticks formations

(This learn forex trading tutorial is about the second option above - Chart Patterns)

The different topics for these two types forex trading analysis are:

Japanese Candles

• 39. Marubozu Candlestick Pattern & Doji Candle Pattern

• 40. Spinning Tops Candles Patterns

• 41. Reversal Candles Patterns

• 42. Inverted Hammer Candle Pattern & Shooting Star Candle Pattern Candles Patterns

• 43. Piercing Line Candle Pattern & Dark Cloud Cover Candle Pattern Candles Patterns

• 44. Morning Star Candles & Evening Star Candles Patterns

Chart Patterns Lessons

• 53. Double Top & Double Bottom Patterns

• 54. Continuation Trading Patterns

• 55. Consolidation Trading Patterns

• 56. Head and Shoulders Patterns & Reverse Head and Shoulders Patterns

The examples below also illustrate the difference of the arrangements of these two forex technical analysis methods.

Candlesticks Patterns - Study of a single candle

Chart Patterns - Study of a series of forex candle s