Reversal Patterns

Pattern Trading gives us consistent, profitable trades.

When the trend comes to an end, the momentum slows down due to shifting of, trader's perception of worthiness of the stock.

At the end of an up trend, the stocks which were attractive to buy, becomes attractive to sell.At the end of a down trend, the stocks which were attractive to sell, becomes attractive to buy.

This shift in the bullish and bearish activity, moves the prices up and down causing patterns in the stock charts, after which the direction of trend reverses. They provide us early signal either to book profit or to make a new entry.

They can be bullish reversal or bearish reversal chart patterns.

Some of the common patterns, after which the trend reverses, are:

• Head and Shoulder
• Cup and Handle
• Broadening Top
• Broadening Bottom
• Symmetrical Triangle
• Double Tops
• Double Bottoms
• Triple Tops
• Triple Bottoms
• Price Channels
• Trend line Breaks
• Island Formations
• Abandoned Baby

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