Pattern Trade

Have you ever seen the video of a sea where a whale is chasing a bunch of small fishes and the fishes are organised in such a way that it looks like a giant fish?

Have you ever seen thousands of insects are flying and forming a big cloud like structure and attacks on the farmer's crop?

Have you ever seen many small birds are flying all together and moving like a giant in the sky?

I guess you have seen those in the nature if not in National geography of course. The beauty of togetherness and moving always gives strength. Similarly in stock markets the bulls and bears when accumulate at a certain price they have the power to move the market in their own direction. That always happens.

With the above analogy what I tried to explain is, we are all human and reacting to wards the price in any asset class, always go with our nature and psychology. We repeat ourselves every-times and our reactions are always same. Historically if you try to follow the chart patterns it always gives the same kind of reaction.

Most commonly founded patterns in stock market is cup and handle, head and solder, double top and double bottom, pole and flag. Every time if you follow the market behavior of the price movement you are bound to observe these patterns no matters whatever time frame you are following in the charts.

If you can observe the patterns for few months you will definitely able to trade the same. However a lot of practice, market behavior , understanding the entry and exit is necessary for the same.

Keep learning and Happy trading ..........

Comments

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