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Trend channel. A price channel is a pair of parallel trend lines that form a chart pattern for a stock or commodity. [1] Channels may be horizontal, ascending or descending. When prices pass through and stay through a trendline representing support or resistance, the trend is said to be broken and there is a "breakout". [2]
A chart pattern or price pattern is a pattern within a chart when prices are graphed. In stock and commodity markets trading, chart pattern studies play a large role during technical analysis. When data is plotted there is usually a pattern which naturally occurs and repeats over a period. Chart patterns are used as either reversal or ...
The pattern derives its name from the fact that it is characterized by a contraction in price range and converging trend lines, thus giving it a triangular shape. [ 1 ] Triangle patterns can be broken down into three categories: the ascending triangle, the descending triangle, and the symmetrical triangle.
The flag and pennant patterns are commonly found patterns in the price charts of financially traded assets (stocks, bonds, futures, etc.). [1] The patterns are characterized by a clear direction of the price trend, followed by a consolidation and rangebound movement, which is then followed by a resumption of the trend. [2]
A line break chart, also known as a three-line break chart, is a Japanese trading indicator and chart used to analyze the financial markets. [1] Invented in Japan, these charts had been used for over 150 years by traders there before being popularized by Steve Nison in the book Beyond Candlesticks.
A wedge pattern is considered to be a pattern which is forming at the top or bottom of the trend. It is a type of formation in which trading activities are confined within converging straight lines which form a pattern. It should take about 3 to 4 weeks to complete the wedge. This pattern has a rising or falling slant pointing in the same ...
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On the technical analysis chart a break out occurs when price of a stock or commodity exits an area pattern. Oftentimes, a stock or commodity will bounce between the areas of support and resistance and when it breaks through either one of these barriers you can consider the direction that it's heading in a trend.