In the context of trading, "parallel channel breakdown" refers to a specific technical analysis pattern observed on price charts. Here's a detailed explanation: Parallel Channel in Trading A parallel channel is formed by two parallel trendlines that act as support and resistance for the price movements of an asset. There are two types of parallel...
A "bullish Gartley" refers to a specific pattern that traders look for in financial markets, particularly in technical analysis, to potentially predict future price movements. It's named after its creator, H.M. Gartley, who introduced it in his book "Profits in the Stock Market" in 1935. The bullish Gartley pattern is a harmonic pattern that consists of four...
A symmetrical triangle is a chart pattern used in technical analysis that is characterized by two converging trend lines connecting a series of sequential peaks and troughs. The trend lines converge to form a triangle that slopes symmetrically, indicating that neither buyers nor sellers are in control. Here's a breakdown of the key points: Characteristics of a...
A bullish flag is a technical analysis pattern that indicates the continuation of an existing uptrend in a financial asset. It is named for its resemblance to a flag on a pole, where the "pole" is a sharp price increase and the "flag" is a period of consolidation or slight retracement that follows. Characteristics of a Bullish Flag: Flagpole: A significant and...
The Bearish Gartley pattern is a specific type of harmonic pattern used in technical analysis to identify potential reversals in financial markets. It was introduced by H.M. Gartley in his book "Profits in the Stock Market" in 1935. This pattern helps traders to predict the end of a corrective move against the main trend and signals a potential selling...
The AB=CD pattern is a common harmonic pattern used in technical analysis of financial markets. It is used to identify potential reversal points in the market by comparing the lengths of two price legs (AB and CD) and their corresponding Fibonacci retracements and extensions. A bearish AB=CD pattern is used to predict a potential price decline. Here’s how you...
A Bearish Bat is a harmonic pattern used in technical analysis to identify potential reversal points in a financial market. It is based on Fibonacci retracement levels and consists of four price swings, creating a specific geometric shape that resembles a bat. Here's a breakdown of the pattern: XA: The initial price move up. AB: The retracement of the XA move,...
The inverse head and shoulders is a chart pattern used in technical analysis to predict a reversal in a downtrend. It's considered a bullish indicator. Here’s a breakdown of its structure and how it can be identified: Structure: Left Shoulder: The price declines to a trough and then rises. Head: The price declines again, forming a lower trough than the left...
A breakout is a term used in technical analysis to describe a situation where the price of an asset moves beyond a defined support or resistance level with increased volume. Breakouts can signal the start of a new trend, either bullish or bearish, depending on the direction of the breakout. Characteristics of a Breakout: Price Movement: The price moves above a...
"Strong support" refers to a price level on a chart where an asset consistently finds buying interest, preventing the price from falling further. This level is identified by multiple touches or tests where the price reaches this point and bounces back up. Characteristics of Strong Support: Multiple Touches: The more times a price level has been tested and held,...
A rising wedge is a bearish chart pattern used in technical analysis. It is formed when the price of an asset is making higher highs and higher lows, but the highs and lows are converging towards each other, creating a wedge-like shape that slopes upward. Here are the key characteristics and implications of a rising wedge: Shape: The pattern is bounded by two...
"Higher high" is a term often used in technical analysis of financial markets. It refers to a price point that is higher than the previous high price in a given period, indicating an upward trend. This concept is part of the pattern analysis used by traders to predict future price movements and make trading decisions.
Objective: Profit from a decline in the underlying asset's price. Max Profit: At the middle strike price at expiration. Max Loss: Limited to the net premium paid. Breakeven Points: Lower: Lower Strike + Net Premium Paid Upper: Upper Strike - Net Premium Paid Market Outlook: Best for expecting a moderate decline and low volatility. Advantages: Limited risk,...
A symmetrical triangle is a chart pattern used in technical analysis that typically forms during a trend as a continuation pattern. It is characterized by two converging trendlines connecting a series of sequential peaks and troughs. The upper trendline is downward sloping, while the lower trendline is upward sloping. Here are some key points about symmetrical...
A "bullish butterfly" is a trading strategy used in the financial markets, particularly in options trading. It's a complex strategy that involves buying and selling multiple options contracts with the aim of profiting from a specific market outlook. In a bullish butterfly, the trader expects the price of the underlying asset to increase moderately. The strategy...
A consolidation range, also known as a trading range, refers to a period in the financial markets when the price of an asset moves within a defined range, showing little overall direction. During consolidation, the price fluctuates between a well-defined upper resistance level and a lower support level. This phase occurs after a trend and typically precedes a...
A bearish Gartley pattern is a harmonic chart pattern used in technical analysis to identify potential reversals in the price of an asset. This pattern typically indicates a bearish trend reversal and suggests that the price of the asset may decline after the pattern is completed. The bearish Gartley pattern consists of four price movements (legs) that create a...
A bullish butterfly is a specific harmonic chart pattern used in technical analysis to identify potential reversal points where an asset's price may change direction from a downtrend to an uptrend. Like the bearish butterfly, the bullish butterfly relies on specific Fibonacci retracement and extension levels. Key Features of the Bullish Butterfly Pattern The...