Chart pattern trading technical Analysis

Multiple Closes: Some analysts use 2 or 3 closes to
confirm the pattern. Whilst this provides even greater
confidence you again risk the chance of missing the
move for it to be profitable enough (for your reward/risk
ratio)

Throwback: A throwback is my preferred style if trading
the pattern. This is where price breakouts out or closes
to confirm the pattern, but then returns to the breakout
line. If this level then holds as either support or
resistance it can provide an excellent entry with greater
confidence and precision to achieve a much better
reward/risk ratio. However the downside to this
approach is you are much more likely to repeatedly miss
moves if it doesn’t quite return to the breakout line.
I would not say that one method is not particularly
better than the other, but it is important to use a
method which suits your trading style and personality.
For example an aggressive day-­‐trader who must be in
the markets as much as possible may not have the
patience to wait for a throwback (in fear of missing out)
so a breakout approach may be better. Similarly and End
of Day trader with more patience may be better suited
to the throwback.

LONG-­‐TERM PATTERNS (LT)
Continuation Patterns

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CHART PATTERN TRADING
Technical Analysis
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Whilst LT patterns (Western Patterns) look simple in textbooks
and hindsight they are by no means easy to trade. The following
pictures are here merely to show you the ideal structure and
methods of projecting targets. Real price charts are never this
pretty – the key is to observe the relationships between the swing
points on the charts.
For example in an uptrend you would observe the HH and HL
(lesson 1) but in a chart pattern you would also observe that these
swing points are contracting over time (getting closer together)
The key to continuation patterns is to use the higher timeframe to
identify the trend (lesson 1) and seek continuation patterns on the
lower timeframes.