11823, 6-08 PM. FTMO Academy Technical Analysis Chart Patterns Trading In this lesson, we will focus on technical patterns. Table of Contents 1.Chart Patterns Trading 1.1. Head and shoulders pattern 1.2.Inverse head and shoulders pattern 1.3. Cup and handle patterns 14, Ascending triangle 1.5, Descending triangle Intps:facademyttmo.comlessonlchar-pattems-trading ann11823, 6-08 PM. FTMO Academy 1.9, Double bottom pattern 110. Flags LI. Bull flag 112. Bear flag Chart Patterns Trading Now that we have covered horizontal and diagonal support and resistance, we can look at chart patterns as they are a combination of both. Chart patterns are one of the oldest parts of technical analysis and price action trading. They were proven many times as a functional way to help technical traders identify the next market direction. That being said, a trader should not forget about the context and current market conditions while making decisions in trading. Head and shoulders pattern The Head and shoulders pattern is believed to be one of the most reliable reversal patterns. It starts after a long bullish trend when the price rises to the peak and pulls back. Shortly after, the price rises again to a significantly higher peak but declines again. Finally, the price goes up for the third time but only reaches a level of the first high. After that, it pulls back and completes the pattern, which signals that an uptrend is ending and the price is about to decline. The first and third peaks are the shoulders, and the second peak is the head. The support level where the price bounces from is called a neckline and is often used as entry- level on a break. Intps:facademyttmo.comlessonlchar-pattems-trading aur11823, 6-08 PM. FTMO Academy prea nf i watt Piie Inverse head and shoulders pattern As with other patterns, there is also an inverse head and shoulders, which occurs after an extended downtrend and indicates that price will go up. Intps:facademyttmo.comlessonlchar-pattems-trading snr11823, 6-08 PM. FTMO Academy Cup and handle patterns Acup and handle pattern is a bullish continuation pattern. It consists of two parts - a cup and a handle. Once a cup is completed, the handle is formed on the right side of it. Ifit is followed by a breakout on a resistance line and traders consider it a signal for an uptrend. The pattern can only be recognized on the long term charts because of the longer time requirement of forming a pattern. N g Intps:facademyttmo.comlessonlchar-pattems-trading 4n711823, 6-08 PM. FTMO Academy ‘As we can see, identifying and trading a ‘cup and handle’ pattern is nothing complicated. Once we enter the trade on a retest of resistance, we can place our stop loss below the low of a handle and let the trade do its work, Ascending triangle Both ascending and descending triangles are one of the most popular patterns among traders. To really help us understand this pattern, we should take a look at it from more of a logical perspective. The ascending triangl formed when the price is unable to break a resistance but at the same time, it is forming higher lows. Intps:facademyttmo.comlessonlchar-pattems-trading snr11823, 6-08 PM. FTMO Academy ‘As we may notice in the example above, the price is bouncing from resistance but is unable to make a lower low on each bounce. This is giving us a bullish signal that a possible break is about to happen. Wn, ) Mal geri Descending triangle Intps:facademyttmo.comlessonlchar-pattems-trading snr11823, 6-08 PM. FTMO Academy Js Falling wedge A falling wedge is a bullish reversal pattern which happens most of the time when the price is, pushing lower but we can see divergence at one of our oscillators. This means that even if Intps:facademyttmo.comlessonlchar-pattems-trading mr11823, 6-08 PM. FTMO Academy Rising wedge Reversal of falling wedge, the price is pushing higher, but we can find weakening clues in our oscillator. Intps:facademyttmo.comlessonlchar-pattems-trading11823, 6-08 PM. FTMO Academy Doubletop pattern The double top pattern is usually made as a topping formation at the end of the trends. Itis a bearish reversal pattern which is characterized by the peak which is shortly followed by the second one at the same or very similar price point. Once the price breaks the support made below the highs, the double top pattern is valid. We use the same term “neckline” which is also used with the head and shoulders pattern. We can either enter the trade once the neckline is broken or wait for the retest of the neckline. Intps:facademyttmo.comlessonlchar-pattems-trading snr11823, 6-08 PM. FTMO Academy res , Neckline The opposite of the double top is the double bottom pattern which is made at the bottom of Double bottom pattem the downtrend. The double bottom is characterized as two bottoms at an equal or similar price level. Same as with the double top pattern, we can enter either at the break of the “neckline” or its retest. IH, aap ‘ Ninf aa a = Intps:facademyttmo.comlessonlchar-pattems-trading son11823, 6-08 PM. FTMO Academy Flags are spotted as consolidation atter a tast trend in the market and they signal the continuation after the breakout. As with all chart patterns, we have a bull and bear flag. Bullflag Rally oe] Flag ratty wee Bear flag Intps:facademyttmo.comlessonlchar-pattems-trading nr11823, 6-08 PM. FTMO Academy Drop Flag Drop Lesson test The lesson questions are based on the knowledge that is acquired during a selected lesson. ‘Some of the questions might have educational purposes and it might be harder to know the answers based on the lessons’ theory. This is due to the fact that the questions also act as educational material for the final exam. You have infinite attempts to pass each lesson. Question rules: All questions have multiple-choice responses. Therefore, one or more answers can be selected as correct. Most of the time only one answer is correct, however, you should still pay attention to multiple-choice possi The ... triangle is visible when the market is bouncing from resistance but cannot make higher highs. (complete sentence) Intps:facademyttmo.comlessonlchar-pattems-trading yanr116123, 6:08 PM FTMO Academy Continuation Ascending Inverted Cup&Handle is a ... continuation pattern. (complete sentence) Bearish Bullish The descending triangle is visible when the market is bouncing from support but cannot make lower ... (complete sentence) Highs. Peaks, Lows. Equals. What pattern is this: a bearish reversal pattern characterised by the peak which is shortly followed by a second peak at the same or a very similar price point. Flag Falling Wedge Double bottom Intps:facademyttmo.comlessonlchar-pattems-trading asi116123, 6:08 PM FTMO Academy What kinds of flags exist in technical analysis? Strong and weak Red and green small and big Bullish and bearish Support and resistance When do inverse head and shoulders occur? Before an extended uptrend. Alter an extended downtrend. Before an extended downtrend. After an extended uptrend. What is the neckline? Possible resistance level where the price bounces. Sell different financial assets. Possible support level where the price bounces. Alevel where the price bounces. Intps:facademyttmo.comlessonlchar-pattems-trading san11823, 6-08 PM. FTMO Academy HhUIRe UHH Wie HUME UF U Wen. (LUPE Ser eneey Double Bottom pattern Double Top pattern Head&shoulders pattern Flag pattern A double top pattern is usually created as a topping formation at the end of a trend, correct? No Yes Price is bouncing from resistance and is unable to make lower lows on each bounce. What possible signal is that? Bearish Bullish submit Intps:facademyttmo.comlessonlchar-pattems-trading ssi11823, 6-08 PM. FTMO Academy +44 20 3322 2983, Whatsapp Privacy Policy Cookies 080000 ABOUTUS Evaluation Process Trading Objectives Why our Challenge? Testimonials Scaling Pian Partners Affiliate Programme Terms & Conditions careers TRADING calendar Fantastic Modern Prop Trading Firm shop APPS ‘Account Metrix Account Analysis, Statistical App Trading Journal Mentor App. Equity Simulator Quick trade manager News Indicator Intps:facademyttmo.comlessonlchar-pattems-trading sen+1123, 6:08 PM FTMO Academy re aay Please note that FTMO does not guarantee the accuracy, completeness or timeliness of the content provided by this website. The content on this website is intended for personal use and general information purposes only. niipsifacademy.tm.convlessonichar pattems-tading air