What are Chart Trading Patterns
A chart pattern is a pattern that is formed when prices of any market stocks, futures, or forex are graphed.
In stock, commodity, and forex market trading, chart patterns play a large part in deciding when to buy or sell.
Charts patterns are formed by trader's emotions.
If a market is in a strong up trend there will come a time in the up trend that the buying and selling will become almost equal which forms a patterns on the chart.
Consolidation patterns include bull flags, pennants, triangles, etc. and these patterns will normally break out in the direction of the trend which is why they are so useful for trading.
There are also patterns seen at market tops and bottoms, also caused by the emotions of trader's and some of these patterns include the headn and shoulder's, wedge's, 123 tops and bottoms, etc.
These pattern can be useful for trader's to get in early on a new market trend.
The break out of reversal patterns will be in the direction of the new trend.