Day trading strategies: the complete guide with all the advanced tactics for stock and options trading strategies. Find here the tools you will need to invest in the forex market

Chart Patterns
Traders also look for specific chart patterns that can indicate coming trend
reversals. For example, you might be looking for signs that a stick is unable
to move any higher in price after having undergone a large and long-lasting
uptrend. What happens in these cases, is that the stock price will touch or
reach a certain price level that is slightly higher than where it is at the
present time, and do so two or more times. But each time it reaches the peak
value, it will drop back down in price. That indicates that the stock has been
bought up as much as it’s going to be bought up at the present time. Traders
also look for signals in the chart that a breakout is going to occur. A
breakout can happen to the upside, that is, stock prices can increase a great
deal, or it can happen to the downside, in which case a strong downward
trend in share price will follow. In this case, you will see the price rise (or
fall) and then for a short period of time, the trend will reverse. Then it
reverts back to the same price rise (or decrease). This is a sign that the stock
is “reverting to the mean,” where the mean is the overall upward (or
downward) trend. If you spot such a pattern early, it’s possible to buy shares
and be ready to profit from selling them when they reach the peak value.

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Bollinger Bands
It’s possible to utilize a wide array of more sophisticated tools. Bollinger
bands attempt to combine the idea of a moving average with moving zones
of support and resistance. The levels of support and resistance for a stock
are calculated at any given time using the standard deviation. Bollinger
bands will include a simple moving average curve in the center to represent
the mean stock price. There will be upper and lower level curves, which
show two-standard deviations from the mean. Here we see a chart of Apple
using Bollinger bands:
For the time period shown, Bollinger bands provide a great deal of
information. The mean share price for the period was $194.38, while the
upper line, two standard deviations above the mean, was $206.05. The
lower line, which is two standard deviations below the mean, is $182.71.
Knowing these values can be useful to some traders. For example, options
traders that sell put options can use the values of the standard deviation to
select their prices.

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