Chart

Patterns
 What is Trading with the Trend?
Trading with the trend is a strategy in which traders make trading
decisions aligned with the prevailing direction of market movement.
This involves identifying and capitalizing on sustained upward
(uptrend) or downward (downtrend) price movements in a given
financial instrument, such as a stock. Traders seek to enter trades in the
direction of the trend, aiming to ride the momentum and capture
potential profits as long as the trend persists. This strategy often
involves using technical analysis tools and indicators to confirm the
trend's strength and identify optimal entry and exit points. The goal of
trading with the trend is to take advantage of the higher likelihood that
prices will continue moving in the established direction, while
minimizing the risk of trading against the prevailing market
momentum.
Advantages of trading with the trend?
1. Higher Probability of Success: Trading with the trend increases the likelihood
of profitable trades since the market tends to move in the direction of the
trend more often than not. Trends can persist for extended periods, allowing
traders to capture multiple profitable moves.

2. Less Stress and Emotional Trading: Following the trend helps reduce
emotional trading decisions. Traders may feel more confident and disciplined
when trading with the prevailing market momentum, leading to fewer
impulsive and emotional decisions.

3. Potential for Trend Extension: In some cases, trends can extend beyond what
might be initially expected. Trading with the trend can allow traders to
capture these extended moves, leading to potentially higher profits.

4. Objective Decision Making: Trading with the trend provides traders with a
clear and objective framework for decision-making. The focus is on following
the prevailing market direction rather than making subjective predictions.
 Continuation Patterns
Chart Patterns tell us the price action of an underlying asset. When
these patterns consolidate during price movements, a continuation
pattern is formed. These patterns occur during short intervals between
uptrends and downtrends to signify either trend is persistent or not.
Traders see this as an indication to avoid placing an order to buy or sell
the asset in question. A breakout or breakdown from the continuation
pattern is the green signal to trade.
 Ascending Triangle
An ascending triangle is formed when
there is an uptrend in the market during
a series of high lows and relatively equal Resistance
Zone
highs. When the uptrend consolidates, a
horizontal line can be drawn across the
highs, which acts as the resistance level.
A rising trendline connecting the higher
lows represents the upward momentum, Support Trendline
(Zone)
indicating a bullish movement. When
you are trading this pattern enter the
trade when the resistance is broken you
can keep the stop loss just below the
slope of the triangle and your profit
should be equal to the the width of the
triangle.
 Descending Triangle
When there is a downtrend in the market
during a series of low highs and relatively
equal lows, it is a descending triangle
pattern. Upon consolidation, the equal
low points mark the support level. This is
the horizontal line of the descending
Resistance Trendline
(Zone)
triangle. The downward momentum is
indicated by the falling trendline
connecting the low highs, mainly caused
by the selling pressure. When you are
Support trading this pattern enter the trade when
Zone the support is broken, you can keep the
stop loss just above the slope of the
triangle. And your profit should be equal
to the width of the triangle.
Symmetric Triangle
In this continuation pattern, there is
balance between the buyers and
sellers—two converging trendlines,
Resistance Zone
one ascending and one descending,
create the triangle. The upper
trendline connects the lower highs,
while the lower trendline connects the
higher lows, implying that volatility is
reducing. You enter the tarde when
Support Zone either of the trendline is broken. When
buying, the stop loss would be placed
below the bottom slope. When selling,
the stop loss would be placed above
the top slope. Target should be equal
to the width of the triangle.
 Bullish Pole N’ Flag Pattern
This pattern is formed after an uptrend,
during the consolidation. As the name
suggests, it resembles a flag on a flagpole—
the flagpole is the sharp rally and the flag is
a rectangular shaped continuation of the
trend. Two parallel lines form the flag, where
the upper one acts as resistance while the
other, support. When trading this pattern
place your stop loss where the Flag's lower
trend line reaches its lowest point. And the
target should be same as the length of the
pole.
 Bearish Pole N’ Flag Pattern
In direct contradiction to a bullish flag
pattern, a bearish flag continues a
downtrend, consolidating the price
movements. After a sharp correction,
represented by the flagpole, prices
move in a narrow range which is
indicated by the support and
resistance lines of the bearish flag.
When trading this pattern place your
stop loss where the Flag's upper trend
line reaches its highest point. And the
target should be same as the length of
the pole.
 Pennant
Pennant is a short term continuation
pattern, it comprises two converging
trendlines with a support (Upward slope)
and resistance (Downward slope) forming a
triangle.
This pattern determines the direction of
trend movement by price breaking:
•If in a downtrend the price falls below the
support line a sell signal arises.
•If in an uptrend the price rises above the
resistance line a buy signal arises.
Here place your stop loss on the other side
(Support or resistance trendline) and the
target will be equal to the length of the pole.
 Channels
These are the extensions of Trendlines. A
parallel combination of 2 trendlines is said
to form a Channel. The upper trendline
serves as the Resistance whereas the
lower trendline serves as the Support.
Note that when you are trading channels
you should keep you stop loss on the
opposite side of your tarde and the target
is same as the width of the channel. Rules
of target and stop loss is same for all types
of channels.
Descending Channel
This downtrend continuation
pattern draws two parallel
boundaries within which the
price of an underlying asset
falls. These boundaries are the
resistance and support levels,
with the upper line
representing the former and
the lower line, the latter.
Ascending channel

In an ascending channel,
price move upwards within
the two boundaries of
support (lower line) and
resistance (upper line). It is
the continuation of an
uptrend and suggests the
asset will rally upon
breakout.
 Horizontal channel
This price pattern shows the equal
forces of buyers and sellers in the
market. Due to this, the price moves
sideways. The breakout of trend
channels predicts the direction of
the price trend. A bearish trend
occurs if the support zone breaks,
while a bullish trend forms if the
resistance zone breaks.
In the horizontal trend channel,
price moves in the form of swings
making highs and lows. It is also
called the ranging market.
Bullish rectangle (Horizontal channel)

Bullish rectangle pattern is a

trend continuation pattern
which is usually formed in an
uptrend and signals the trend’s
direction. It is characterized by
support and resistance levels
which connect recent highs
and lows of the price. If the
price rises above the resistance
line a buy signal appears.
 Bearish rectangle (Horizontal channel)

Bearish rectangle pattern is a

trend continuation pattern
which is usually formed in a
downtrend and signals the
trend’s direction. It is
characterized by support and
resistance levels which
connect recent lows and
highs of the price. If the price
falls below the support line a
sell signal appears
Cup and Handle
The Cup with Handle is a bullish
continuation pattern that marks a
consolidation period followed by a
breakout. The pattern consists of two
components, the handle and the cup, as
suggested by its name. The cup takes
shape following an advance and has a
bowl-like or rounded bottom. The
handle forms when the cup is finished,
and a trade range appears on the right
side. When the handle breaks out of its
trading range again, the previous rise
will continue. When you are trading this
pattern keep your stop loss below the
handle and the target should be same
as the dept of the cup.
 Inverted Cup and Handle

The inverted cup and handle pattern is

a bearish continuation pattern that
appears in an downward price
trend.The pattern is considered valid
when a downward breakout occurs
and the price closes below the support
or neckline.This upside-down cup
pattern works the same way as the cup
and handle pattern, except that the
breakout direction is downward
instead of upward.When you are
trading this pattern keep your stop loss
above the handle and the target
should be same as the dept of the cup.