Understand Chart Patterns

In Charting, there are some pattern that we need to take note.
Some of the pattern formation are bullish, bearish

Bearish 

Double Top Formation Pattern (look like an M)- Expected outcome is bearish.
Triple Top Pattern - Expected outcome is bearish.(similar to double top but with one more peak)
Once it crosses the neckline move in when the next candlestick is forming.
 *Luck is when preparation meet opportunity.

Trade Setup

After Shorting, Set a 20pip stop loss above the neckline and Take Profit at 30 pips below the neckline.






Head and Shoulder Pattern - Expected outcome is bearish
Once it crosses the neckline move in when the next candlestick is forming.
Currently it have already cross the neckline in this daily chart and the second candlestick is forming.
Thus you saw the last 2nd candle is an bearish engulfing candlestick (More explanation under candlestick
chapter) I would say it is the right time to short it for position trader.

Bullish

Inverse head & shoulder formation -Expected outcome is Bullish
From the 15min EURUSD chart, which looks like a inverse head & shoulder formation.
It is still too early to decide unless it breaks the neckline.

Double Bottom formation (which look like a W, Reverse of Double Top)- Expect a bullish outcome.
Triple Bottom formation (Reverse of Triple Top) - Expect a bullish outcome

Understand Trend

Trend is like waves in the sea. A good trader ride the waves of trend and NOT against it.
Trending is very important in forex. As it gives you an idea what is the current trend is like so that you could follow the trend.

You could use a 5min/15min/1hrs/daily chart to plot a trendline depend on what type of trader are you.
Are you a swing trader, technical trader, fundamental trader, position trader?

There are 3 types of trend.
1) Uptrend
2) Downtrend
3) Consolidate/Sideway Trend


Print screen of an 1hour EURUSD chart. Which look like a Downtrend?

In a 15min EURUSD chart it looks bullish. Which looks like an Uptrend

In a 5min EURUSD chart, which looks like a Consolidation of trend.

 From the 3 chart above that gives you the rough idea what is trend like. To speak the truth, all the
above chart is printscreen from the same currency pair (EURUSD). The only differences is the Time Frame.

What am i trying to imply? 
Defining the trendline depends on how the trader look at the chart & time frame.
A swing trader and Day trader would normally look at a 1min to 30min chart. It is telling you what is the current trend in a short period. In most cases, swing trader who normally aim a 20 -50pips return.

A technical trader purely depend on the technical analysis for judgement.

A fundamental trader purely depend on the news, reports, currency report for judgement.
They move in when there is big news in due time. We call them News trader.

  A position trader is looking at a bigger time frame. From hourly to daily time frame. Why are they called
position trader? They hold their position for days & weeks before they harvest their return. Their returns could be up to 500 to 1000pips.