what is chart patern in trading 2023.How to Stop your loss step by step.
when people think of technical analysis they Often first thing of well known visual chart patterns like head and shoulders, triangles , pennants ,gaps, and so on. such pattern whether they consist of one bar or several dozens suggest different kinds of price behavior depending on their specific market context.
in this article we Will discuss not only the structure of chart patterns but also the factors that impact their inerpretation and application.
Yes, in this article we will learn about some important chart patterns, by studying which you can minimize your losses in your trading career.
first of all, we will know about Gaps.
what is gaps? How to trade if the market opening gap up and gap down?
what is gaps? How to trade if the market opening gap up and gap down?
a gap day is one in which the low is above the previous day’s high or the high is below the previous day’s low. There are four basic types of gaps.
how to trade with common gaps?
this type of gap occurs within a trading range and is not particularly significant.
As you can see the common gap in the given picture.
what is breakaway gap? How to trade if the market opening breakaway gap up and breakaway down?
this type of gap occurs when price surge beyond the extreme of a trading range living and area in which no trading activity has occurred .
You can see the break away gap in the picture below.
A break away gap that is not Filled within a few days is one of the Most significant and reliable chart signals.
what is runaway gaps? How to trade in the stock market if market is opening runaway gaps?
what is runaway gaps? How to trade in the stock market if market is opening runaway gaps?
this type of gap occurs when are Trend accelerates and is a characteristic of strong bull and bear markets.in
You can see the runway chart patterns in the picture given below.
image
What is Exhaustion gap? How to trade in the stock market if market is opening exhaustion gap?
What is Exhaustion gap? How to trade in the stock market if market is opening exhaustion gap?
this type of gap occurs after an extended price move and is soon followed by a trend reversal.
You can see exhaustion gap chart patterns in the picture given below.
the exhaustion gap may sound like a particularly useful technical signal until one Realised that the difference between an exhaustion gap and a runaway gap is hindsight how however in some instance an exhaustion gap can be recognised at a very early point in the trend reversal.
what is spikes? How to work spikes in the stock market?
Spikes spike high is a day whose high is sharply above the high of the preceding and succeeding days.
frequently the closing price on a spike high day will be near the lower end of the day’s trading range.
A spike high is meaningful only if it occurs after a price advance in which case it can often signify at least ot temporary climax in buying pressure and Hance can be viewed as a potential relative high. sometimes spike high will prove to be major tops.
Generally Speaking The Significance Of A Spike High Will Be Enhanced By The Flowing Factors.
- a wide difference between the spike high and the highs of the preceding and succeeding days
- a close near the low of the day’s range.
- a substantive price advance preceding the spike’s formation.
the more extreme each of this conditions the greater the likelihood that a spike high will prove to be an important relative high or even major top.
similarly a spike low is a day whose low is sharply below the law of the preceding and succeeding days.
frequently the closing price on a spike low day will be near the upper end of the day’s trading range.
A spike Low is meaningful only if it occurs after a price decline, in which case it can aften signify at least or temporary climax in selling pressure, and Hance can be viewed as a potential relative law. SomeTimes spike Low s will prove to be major bottoms.
generally speaking the significance of a spike Low will be Enhanced by the following factors.
1. A wide difference between the law of the preceding and succeeding days and the spike low.
2. A close near the high of the day’s range.
3.A substantive price decline preceding the spike’s formation.
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