What is a chart pattern?

Chart patterns are geometric shapes drawn onto price charts that can help traders understand price action, as well as make projections about where the price is likely to go (. e.g., price breakouts and trend reversals).

What are stock chart patterns?

Chart patterns are unique formations within a price chart used by technical analysts in stock trading (as well as stock indices, commodities, and cryptocurrency trading ). The patterns are identified using a series of trendlines or curves.

What are the different types of chart patterns?

There are two main types of chart patterns: Reversal patterns. In general, for both continuation and reversal patterns, the longer the pattern forms, and the larger the price movement within it, the more significant the predicted move once the price breaks out.