A chart pattern is simply a pattern formed within a security's chart. These patterns are formed during the battle between bulls and bears.
Chart patterns reorganization and pattern studies is part of the technical analysis discipline.
Traders try to recognize patterns in a chart and make decisions based on how they perceive the pattern.
There are many popular chart patterns used by traders in their decision making process.
Popular chart patterns include:
Trend lines
Double top and double bottom
Price channels
Cup and handle
Head and shoulders
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
