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FXL Cheat Sheet - Market Patterns

1) The document discusses various common market patterns including triangles, flags, wedges, tops/bottoms, head and shoulders patterns, channels and rectangles. 2) For each pattern, it describes when they typically form and whether they indicate a bullish or bearish continuation or reversal. 3) The safest entry for each pattern discussed is waiting for a retest of the breakout level along with candlestick confirmation.

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sting74
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504 views4 pages

FXL Cheat Sheet - Market Patterns

1) The document discusses various common market patterns including triangles, flags, wedges, tops/bottoms, head and shoulders patterns, channels and rectangles. 2) For each pattern, it describes when they typically form and whether they indicate a bullish or bearish continuation or reversal. 3) The safest entry for each pattern discussed is waiting for a retest of the breakout level along with candlestick confirmation.

Uploaded by

sting74
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FXLifestyle - Trade Your Future Cheat Sheet #FXL_Style

Market Patterns
Triangles

Generally a bullish Can be considered both a bullish and Generally a bearish


continuation pattern, found in bearish pattern. Price in continuation pattern, found in a
a period of consolidation in an consolidation and both forces of period of consolidation in an
uptrend. Safe entry after retest supply + demand are equal. Wait for downtrend. Safest entry after
of broken trend line + breakout, retest and candlestick retest of broken support and
candlestick confirmation! confirmation for safest entries! candlestick confirmation!

Flags

Generally forms after price spikes Generally forms after price collapses
up (pole). Price forms falling (pole) and attempts a trend
parallel upper and lower trend lines reversion(flag). The opposite of
(flag). Safest entry is retest after bullish flag. Safest entry is retest
breakout of resistance and after breakout of support and
candlestick confirmation! candlestick confirmation!
Continuation Pattern! Continuation Pattern!
FXLifestyle - Trade Your Future Cheat Sheet #FXL_Style

Wedges

Ascending and Descending Broadening Wedges can extend for long periods of time since price
extends outwards with rising volatility. These patterns can appear in either uptrends or
downtrends. Can be both continuation and reversal patterns. The absolute safest entry in
using these three patterns is on the retest of the breakout in either direction and other
confirmations to support the direction of price!

Preferably like to use these as continuation patterns but can be also used for reversals! Both sides of the
wedge should have three touches prior to breaking out. The safest and only entry should be on the retest
of the breakout with a candlestick confirmation giving a you a favorable risk to reward ratio.
FXLifestyle - Trade Your Future Cheat Sheet #FXL_Style

Tops/Bottoms


Two of the most common trend reversal patterns. 2x Bottoms are a


bullish reversal pattern and 2x Tops are a bearish reversal pattern.
If you are using Time to draw your Fibonacci you will notice that
most of the time the neckline will bounce off the 50 FIB, this will add
to the validity of the two patterns. The safest and best entry is on the
retest of the broken neckline on either pattern!
You can look for these patterns as M’s or W’s!
3x Tops & 3x Bottoms are also possible and work the same way.

Head & Shoulders/Inverse Head Shoulders

A Head Shoulders is a bearish reversal pattern formed A Inverse Head & Shoulders is a bullish reversal
when the price makes a high, pulls back, makes a pattern formed the opposite way of the regular
higher high, pulls back, and then makes a lower high. Head & Shoulders pattern. Right shoulder
This creates three peaks. For extra validity, if you are bouncing off the 50 FIB also adds extra validity
using time to draw your fibonacci, the right shoulder as well on the Inverse HS.
will bounce off the 50 FIB!
FXLifestyle - Trade Your Future Cheat Sheet #FXL_Style

Channels/Rectangles

Channel Ranges are basically either a uptrend or downtrend and


can be used in both ways drawn by a supporting and resisting trend
line. Preferably like to use these as continuation patterns instead of
reversals but can be both. Price is basically coming to a halt and
ranging between two price points before deciding which direction it
will go for both channels and rectangles. You can place long
positions during the range off a supporting trend line and short
positions off a resistance trend line with candlestick confirmation. As
always when price breaks the channel or rectangle wait for a retest
of the broken trend line and candlestick confirmation before entering
short or long for the safest entry!
Remember the trend is your friend!

Sign up for our courses to be able to visually see how to properly trade these
patterns and what exact confirmations are used in conjunction to validate these
patterns and be able to maximize your profits!

Backtest these patterns on your charts to train your eyes to be able to identify these patterns
quicker and more effectively. Use other confirmations such as indicators and price action to
validate your entry bias. These patterns can be found on any timeframe and the higher the
timeframe the more powerful the pattern will be!

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